PSO Profit Surges 136% to Rs. 9.39 Billion in 1QFY26

Pakistan State Oil Company Limited (PSO) posted a profit after tax (PAT) of Rs. 9.39 billion for the first quarter of fiscal year 2026. It translates into earnings per share (EPS) of Rs. 20.0, up 136 percent year-on-year from Rs. 3.97 billion (EPS: Rs. 8.5) recorded in the same period last year. The improvement in profitability was driven by higher inventory gains, improved gross margins, and a sharp decline in finance costs, according to Arif Habib Ltd. Net revenue stood at Rs. 737.2 billion, down 6 percent year-on-year due to lower volumes in high-speed diesel and furnace oil. However, motor spirit (MS) sales rose 1 percent to 761,000 tons, while HSD sales increased 6 percent to 675,000 tons. Average MS and HSD prices were higher by Rs. 2.9 per liter and Rs. 7.7 per liter, respectively, compared to last year. Gross profit increased 19 percent year-on-year to Rs. 30.05 billion, translating into a gross margin of 4.1 percent, the highest since September 2023. The improvement was attributed to higher inventory gains and better pricing in the lubricant segment. Finance costs declined sharply by 43 percent year-on-year to Rs. 5.95 billion, mainly due to reduced short-term borrowings and lower interest rates. Other income also rose 40 percent to Rs. 4.55 billion, driven by financial charges on line-fill cost. On the balance sheet side, PSO’s receivables dropped by Rs. 42 billion during the quarter to Rs. 426 billion, reflecting improved recovery. The company booked an effective tax rate of 54.4 percent in 1QFY26 compared to 66.1 percent in the same period last year.