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Group:Fahad Ur Rehman Khan

Zoya ArifHadiqa HanifRimsha Tahir

Sama AsifMohsin Alam

Financial Analysis of

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The history of PSO starts from mid-70s Pakistan Government ambulated three companies: Esso

Eastern, Pakistan National Oil (PNO) and Dawood Petroleum as part of its reorganization plan.

It is considered as one of the most successful mergers in the history of Pakistan.

The main objective of the Nationalization of POL Giant was backed by the facilitation of the sensitive national issue of providing fuel to Defense forces.

During the war of 1971, the nation suffered from the problem that no fuel company was interested to provide fuel to the Armed forces at that and the sensitivity of the nation was in very crucial condition.

PSO’s Background

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Than the Federal government decided to nationalize three petroleum companies along with management control.

Pakistan State Oil Company Ltd; is the largest oil marketing company of Pakistan. It is engaged in the Storage, Import, Distribution and Marketing of Petroleum Products, Petrochemicals, Aviation & Bunker Fuels, LPG and CNG Dominates the Country’s Fuel and Energy Need.

PSO’s Background

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Pakistan State Oil (PSO) is the oil market leader in Pakistan enjoying

PSO has 79% share of Black Oil market and 58% share of White Oil market.

Largest oil marketing company in Pakistan Annual turnover of 6.8 billion $ Market share of 80% in Black oil Market share of 59% in white oil Winner of Karachi Stock Exchange top companies award First company to become member of world economic

forum 3700 retail outlets across Pakistan Also forefront in humanitarian efforts

Company Introduction

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Oil and gas are the two of the key components of the energy mix contributing around 80% share to the 64 million TOE of energy requirement in the country.

Pakistan estimated that there are 27 million barrels of reserves available that are recoverable for the use and Pakistan’s consumption is 19.21 million tones.

The average oil production was 66,032 barrels per day in 2013 and it was the growth of around 13% over the last year.

There are total 7 oil Refineries, 6772 petrol stations are operating in Pakistan and 258 oil & gas discoveries and 803 wells drilled till now.

Oil Industry Growth

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Profit of oil industry has been increased in the ninth month or 3rd quarter of fiscal year 14 while it was decreasing before.

Major oil and gas exploration and production companies working in Pakistan include Pakistan Oilfield, Gas development Company and PSO.

Oil Industry Growth

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Shell Pakistan Limited Total Parco Pakistan Limited (Now Pak-Arab

refinery) Attock Oil Company Limited Caltex Oil Pakistan Limited

Key Players

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Financial Analysis

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Liquidity Ratios

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Turnover Ratio

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Profitability Ratios

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Horizontal and VerticalAnalysis

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Analysis Pakistan State Oil Attock Oil Company Limited

Earning Per Share 80.31 65.17

Stock in trade 86,297,218 6,787,904

Sales 1,409,574,264 240,567,960

Net Sales 1,187,639,316 205,162,911

Comparative Analysis

Pakistan State oil vs Attock Oil LimitedPakistan State Oil, is easily taking over the Attock Oil Company, as in boosted sales due to the broad inventory of fuel delievery.

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Auditors Report

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The expenditure incurred during the year was for the purpose of the Company’s business.

The business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the Company.

Auditors Report

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PSO has a market share of 22% in CNG industry in 2013. It has shown growth of 13% in 2014 against industry growth of 11% as compared to 2012.

Pakistan State Oil, is gaining its market share, sales as well as the overall value of the company.

Pakistan State Oil needs to fix, are the current ratio and they need also to focus on less credit sales, as their payback time is high, but cash sales should also, be focused due to the factor of seeing converting sales into cash.

Conclusion and Recommendation

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Moreover, the Gross profit needs to fix as their payback period is so long, which makes them do credit sales, and credit sales are making gross profit low.

And less credit sales can boost their value of converting sales into cash

Conclusion and Recommendation

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PSO’s plans to promote PSO’s lubricants range in the market to further strengthen the company’s balance sheet.

PSO future plan entail exploring new markets, increasing POL sales using innovative ways, enhancing retail network, expanding lubricant product range, improved product movement mechanism in coming years.

Enhanced focus shall be on operational streamlining, cost reductions, cash sales, minimizing product losses, cash sales, improved quality, quantity testing, joint ventures.

Pakistan State Oil’s Future Planning

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Rising international crude oil prices amid fixed absolute margins for the OMCs will increase working capital requirements and reduce return on working capital for them. 

Pakistan State Oil’s Future Planning

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Thank You!