pso financial outlook
TRANSCRIPT
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1. Oil and Gas Industry Overview...........................................................................................................1
1.2 Current Condition of Oil and Gas Sector...........................................................................................3
1.2.1 Oil (Petroleum Product).......................................................................................................4
1.2.2 Natural Gas..........................................................................................................................4
1.3 Expected Future Growth and Contribution in GDP.....................................................................5
2. Company Profile..................................................................................................................................7
2.1 Strategic Objectives.....................................................................................................................9
2.2 Company Values..........................................................................................................................9
2.3 Credit Rating...............................................................................................................................9
2.4 Financial Analysis.....................................................................................................................10
3. Director’s Report...............................................................................................................................10
3.1 Highlights of Director’s Report.................................................................................................12
4. Auditors' Report................................................................................................................................13
5. Financial Ratios.................................................................................................................................15
6. Horizontal and Vertical Analysis - Balance Sheet.............................................................................17
7. Vertical and Horizontal Analysis of Income statement......................................................................19
8. Cash Flow Statement.........................................................................................................................21
9. Statement of Changes in Equity.........................................................................................................22
10. Pricing Chart..................................................................................................................................23
11. Conclusion.....................................................................................................................................24
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1. Oil and Gas Industry Overview
Pakistan's location being at the crossroads of Central Asia and the Arabian Sea has drawn
attention to its significance as an attractive market and a regional transit route for energy. Oil and
gas are two of the key components of the energy mix contributing 80% share to the 64 million
TOE of energy requirement in the country. The government is putting together investor-friendly
policies to increase the share of local resources in the country.
Pakistan with its ideal location is recognized as the regional gateway for energy. The energy
sector continues to dominate the overall structural character of Pakistan’s economy. The
Government has declared the Power Sector as one of the top priorities for investment and is
taking all necessary measures to build a more conducive environment by simplifying procedures
to facilitate potential investors. These policies have resulted in US$ 605 million of foreign direct
investment in the Oil & Gas sector for the year 2009-10. Oil & Gas Sector Pakistan’s burgeoning
demand for oil and gas has stimulated the need for large-scale exploration and expansion projects
Total Resource Potential : 27 Billion Barrels Refining Capacity : 14 Mi l l ion Tones Recoverable Reserves : 248 Million BarrelsConsumption : 19.21 Million TonesProduction : 66.032 Barrels/dayImports : 16 Million Tones
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and investments to help boost oil and gas production. Pakistan mainly depends on Oil & Gas for
its energy generation. These two components of energy contribute 77.40% to the energy
requirement of Pakistan. Pakistan has estimated oil reserves of 303.63 million barrels while its
current production is 65,531 barrels per day. The gas reserves of Pakistan are estimated to be
28.32 TCF while its current production is 4 billion cubic feet per day. Currently, seven refineries
are operating in the country, having the capacity to refine 248,506 bpd. Three more oil refining
companies would be established with their total capacity of refining crude of 465,000 barrels per
day (bpd) to enhance the existing quantity produced by seven companies. After the establishment
of these companies the country’s refining capacity would reach up to 713,506 bpd. Gas is the
major source of energy in Pakistan. Pakistan has a well developed gas transmission
infrastructure. The gas distribution companies plan to invest US$ 285 million over the next five
years in gas sector. Pakistan has also signed a US$ 7.6 billion gas pipeline project which would
be providing 750 million cubic feet of gas to Pakistan daily from Iran by mid-2015. The shift to
CNG has proved immensely popular which is clearly evidenced by the fact that the number of
CNG vehicles has reached two million, giving Pakistan the distinction of having the highest
number of natural gas vehicles in the world. In the previous year, a total investment of US$ 833
million has been made in the CNG sector. In order to promote LPG as a potential energy fuel, the
Government of Pakistan deregulated the sector in 2000 to attract investment and give the LPG
market a much needed boost. As a result, an investment of US$ 200 million has been made to
develop LPG infrastructure
1.2 Current Condition of Oil and Gas SectorEnergy outages hampered economic growth of Pakistan. Further since early 2000s, the
energy sector (Especially its sub sector electricity) received greater attention because of
the faster rate of growth in its demand.
Circular debt, weak financial position of energy companies, falling gas production,
and high dependence on Oil/gas (over 80%), low exploitation of indigenous coal and
hydel resources and unutilized power Generation capacity are some of the significant
constraints leading to severe energy shortages.
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In Pakistan oil and gas are two key components of energy mix contributing almost 65
percent (oil
15% and gas 50%) share to the 64.7 million TOEs of energy supplies during 2012
while share of coal and nuclear is almost 7 percent and 2 percent, respectively
During calendar year 2012, net primary energy supply remained 64, 727 thousand
TOEs posting a moderate growth of 0.32 percent compared to last year.
The final energy use during current year remained 40, 026 thousand TOEs showing a
growth of 3.0 percent compared to last year.
1.2.1 Oil (Petroleum Product)
The total oil resource potential is 27 million barrels with production of 66,032
barrels per day.
24, 573 thousand barrels (67,140 barrels per day) of crude oil is extracted or
produced locally while almost double of it that is 47, 104 thousand barrels was
imported during 2012.
8,395 thousand tones of petroleum was produced domestically while 11, 507
thousand tones was imported.
In 2012 the import bills increased to US $ 10,292 million while High Sulphur
Furnace Oil (HSFO), High Speed Diesel (HSD) and Motor Spirit has the highest
share of 48, 32 and 16 percent, respectively.
The main users in the consumption of petroleum products are transport and power
which jointly have almost ninety percent share in total consumption.
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Almost 65 percent electricity is generated by thermal in which contribution from
furnace oil and diesel is 52 percent.
1.2.2 Natural Gas During 2012 total production remained 1,559 billion cubic feet that is equivalent
to 32 million TOEs which shows a growth of 6 percent when compared to last
year in billion cubic feet while in TOEs it shows a growth of 4.5 percent. `
During July-March FY 13, gas supplies remained 1,139,253 million cubic feet as
compared to 1,164,915 million cubic feet last year indicating a negative 2.2 per
cent.
During July-March 2012-13, power sector (27.5 %)has the highest share in
consumption of gas,
While industry sector has a share of 22.6 % while negative growth of 16 percent
has been witnessed in transport sector. However transport sectors had posted a
positive growth of 5.3 percent in gas consumption last year.
During July 2012 to February, 2013, the two Gas utility companies (SNGL &
SSGCL) have laid 14 Kms Gas Transmission Network, 4326 kms Distribution
and 831 Kms Services lines and connected 261 villages/towns to gas network.
During this period, the gas utility companies have invested Rs. 1513 million on
Transmission Projects, Rs. 11,925 million on Distribution Projects and Rs.1,898
million on other projects bringing total investment to about Rs. 15,336 million.
During this period, 237588 additional gas connections including 236997
Domestic, 221 Commercial and 370 Industrial were provided across the country
1.3 Expected Future Growth and Contribution in GDP
The Oil and Gas sector in Pakistan has seen phenomenal growth since the independence
in 1947 when oil quantities produced were scarce. These limited quantities were being
produced from a few small fields located in the Potohar region. At that time was no gas
production.
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Over the past half century the petroleum industry has played a significant role in national
development by making large indigenous gas discoveries. Pakistan meets about 18% of
its oil demand from local sources. The Government realizing fully well that while a fiscal
package with competitive incentives plays a vital role in attracting fresh investment an
adequate protection of the companies' investment, is an essential prerequisite for the
promotion of petroleum exploration in the country. This led to the enactment of the
Foreign Investment Protection law of 1976 by the Parliament, under which the
Government guaranteed full safeguard to foreign investments in Pakistan.
Pakistan's present’s economy growth rate shows that our energy needs will increase from
64.5 Million Tonnes of Oil Equivalent (TOE), in 2010-11 to over 361.31 Million TOE in
2030. To overcome the projected needs of energy, major dependence will remain on the
Oil & Gas sector. A total of 808 exploratory wells have been drilled so far in the
sedimentary basins of Pakistan covering 827,267 Sq. Kms. Till 31st July 2012, 250 oil
and gas fields (58 oil and 192 gas and gas/condensate) have been discovered in various
basins of Pakistan with a success rate of 1:3.22. The remaining recoverable reserves of
natural gas and oil are estimated at 26.6 Trillion Cubic Feet (TCF) and 341.9 Million US
Barrels respectively.
Large areas of Pakistan's petroliferous basins e.g. Offshore Indus Basin, Makran Basin &
Balochistan Basin still remain as a geological frontier and hold promise for the future in
view of the multiple havitats for petroleum generation and accumulation which may act
as a game changer in energy self-sufficiency. Independent international studies indicate
an oil and gas potential that is many times more than these proven reserves. This area is
totally under-explored & exports believe that it has huge prospectus for oil & gas.
Following steps are being taken to enhance the exploration of oil & gas in the country: -
New Petroleum (Exploration & Production) Policy, 2012 will accelerate E & P
activities and promote foreign direct investment in the oil & gas sector of Pakistan.
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Basin study has been completed to co-relate entire data of different basins. It would
help to identify new play types and help in new discoveries & simultaneously
increase in indigenous energy.
Have state-of-the-art data repository centre-digitized data is available to existing and
new companies to participate in exploration.
For exploration of non-conventional hydrocarbons separate policies on Tight Gas,
Low BTU, and Low Pressure Flared (LPF) gas have been prepared.
Completion of pending development projects-can and 400-500 MMCFD gas. At the
current oil and gas production/consumption rate, the oil reserves can last for 11 years
and gas for the 18 years. The government is thereof, besides making efforts to
increase local supply has signed an agreement for import of gas from Iran.
Additionally government is also considering different options of import of gas from
Turkmenistan & Qatar and import of LNG to cope with the increase in demand
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2. Company Profile
Pakistan State Oil (PSO) is the biggest Oil Marketing Company (OMC) in Pakistan with a
generally created framework, a pervasive retail system and a prevailing position in larger part of
the item markets with an in general piece of the pie of 64%.
currently, PSO is included in the space, dissemination and advertising of Petroleum, Oil
and Lubricant (POL) items incorporating Motor Gasoline (Mogas), High Speed Diesel
(HSD), Furnace Oil (FO), Jet Fuel (JP-1), Kerosene, CNG, LPG, Petrochemicals and
Lubricants.
PSO has the biggest space limit around Omcs in Pakistan. With 9 establishments and 23
terminals, PSO can store roughly 1 million metric tons which speaks to 74% of the
country's sum space limit.
PSO has been driving the wheels of the economy by fuelling the force, horticulture,
flight, marine, rail, auto and mechanical parts. Being the biggest fuel supplier for the
force part, PSO supplies fuel to 11 Independent Power Producers (Ipps) and 3 Gencos
crosswise over Pakistan.
PSO likewise gives fuel to 9 landing strips across the nation and the 2 significant ocean
ports in Pakistan.
The organization has the most far reaching retail system in the nation with over 3500
retail outlets out of which 1900 outlets are according to New Vision Retail Outlet
(NVRO) models, 300 outlets pander to mass customers and 29 outlets are leader stations
titled Company-possessed and Company-worked (Co-Co) locales. These outlets convey
the largest amounts of client administration and forethought.
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Being the first OMC to requisition a Compressed Natural Gas (CNG) office in January
1996, PSO now has 257 CNG stations operational in more than 34 urban areas and towns
crosswise over Pakistan.
The organization has won the "Karachi Stock Exchange Top Companies Award" for ten
sequential years and is likewise the main Pakistani organization that is a part of the
World Economic Forum.
PSO is a blue chip organization in both name and soul and additionally the first open
organization to pass the 0l trillion rupee income imprints.
PSO has set new guidelines for Omcs crosswise over Pakistan by starting chip-based
Smart Cards with secure chip innovation. PSO shrewd cards pander to distinct clients,
corporate elements and in addition armada managers and furnish them with
advantageous, secure and bug free transactions in addition to a complete fuel
administration result.
as some piece of the Non-Fuel Retail (NFR) activity, PSO has more than 50 Automated
Teller Machines (Atms) and 150 Shop Stops at its retail outlets crosswise over Pakistan
which furnish clients with round the clock administration and accommodation.
PSO has 24 Mobile Quality Testing Units (Mqtus) rightfully furnished with modernized
and state-of-the-workmanship petroleum testing gear to guarantee the vicinity of
predominant quality items at retail outlets, mechanical buyer destinations, establish
2.1 Strategic Objectives
Retain authority position in oil market and make PSO as a brand of decision for
clients
Rationalize item portfolio with a keep tabs on high edge items
Optimize item obtainment from nearby and global sources and seek after
guaranteed access to long haul and savvy supply sources
Pursue operational effectiveness and quality while guaranteeing wellbeing of
individuals, supplies nature's turf
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Ensure lawful and administrative agreeability in all circles of operations and new
business improvement
Pursue constant change, development and innovative headway
Enhance corporate competencies and inspiration through expertise upgrade,
administration improvement and prize projects
Maximize come back to shareholders and satisfy obligations as a mindful corporate national towards a more extensive aggregation of stakeholders incorporating the social order and neighborhood in quest
2.2 Company Values
The PSO core values are based on excellence, Cohesiveness, Integrity,
Innovation, Respect, Innovation, and Corporate Responsibility
2.3 Credit RatingLong Term Credit Rating AA+
Short Term Credit Rating A1+
Rating By : The Pakistan Credit Rating Agency Limited (PACRA)
Rating Last Updated : March 2012
The Pakistan Credit Rating Agency (PACRA) has relegated long haul and fleeting
substance appraisals of "AAA" (Triple An) and "A1+" (An One Plus) individually
to Pakistan State Oil – the biggest oil showcasing organization of Pakistan. These
appraisals signify the least desire of credit hazard radiating from an incredibly
solid limit for convenient installment of monetary duties. These are the most
noteworthy FICO scores in PACRA's appraising scale
2.4 Financial AnalysisAfter analyzing Balance sheet remarks on Analysis As of June 30, 2013,
Huge variety is investigated as takes after: Shareholders value climbed by 24% as contrasted with FY 2012 because of net held salary created throughout the year.
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Total non present stakes expanded by 491% as contrasted with FY 2012 because of speculations made in PLBS adding up to Rs. 46bn. –
Current Assets diminished by 34% as contrasted with FY 2012 fundamentally because of fall in exchange obligation adjusts by 65% by virtue of infusion of trusts by Gop to intention the issue of round obligation. –
Total liabilities declined by 26% as contrasted with FY 2012 basically because of lessening In commitments to nearby refineries by 83%. Their duties were settled out of stores gained from Gop throughout the present year under the roundabout obligation settlement plan.
3. Director’s Report
Mr. Amjad Pervez Janjua
PSO is the oil market leader and one of the largest and most visible companies of Pakistan. It is
the linchpin of Pakistan's energy sector and the lifeblood of national economy. Our company has
been the oil market leader with a dominant or leading position in major product markets. At the
close of FY 2012-13, PSO had a market share of 64%, comprising 75.5% share in Black Oil and
557% share in White Oil. PSO's substantial strengths include a talented pool of committed
workforce, a well-established operational infrastructure and an extensive retail network.
However, the company faces significant challenges posed by intensifying competition, reliance
on external supply sources, and default on payment by large customers. The strength of the
competition in our major markets means that PSO is unable to stand still. We have to provide an
effective response to present and potential business challenges through high-quality professional
teamwork in line with our corporate vision, mission and values.
We realize that our competitive advantage lies in provision of the highest quality petroleum
products and services to our customers. Accordingly, we strive to ensure excellence in customer
service through safe, reliable, environment friendly and cost-effective operations. We have
undertaken market development, market penetration, product development, product portfolio
rationalization, strategic partnerships and business diversification initiatives.
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Total quality management is the cornerstone of our operational activities. It covers equipment,
people and environment. Timely maintenance, refurbishment and upgrading of facilities is
carried out to ensure consistent conformance to prescribed standards and specifications across
the whole range of activities from product receipt, storage, transportation and delivery. The
overarching theme of our operations is to ensure that the products and services satisfy the
customers' needs.
As a responsible corporate citizen, we are committed to fulfillment of our responsibilities
towards internal and external stakeholders. Ensuring health and safety of PSO employees and all
those likely to be affected by the company's operations, observing the highest standards of
security, and supporting deprived segments of society are high on our corporate agenda. The
company realizes that in addition to being directly accountable to its shareholders, it Is
responsible to a wider group of stakeholders for supporting sustainable development and
expanding economic opportunity. In order to sustain and enhance effectiveness of our role iri the
times ahead, we plan to gain access to long term and cost effective supply sources and undertake
business enhancement and diversification initiatives. In addition, we shall undertake strategic
initiatives in all spheres of operations while remaining within our corporate mandate and the
normal business protocol, and while ensuring legal and regulatory compliance and following
high ethical values. A comprehensive human resource development program to enhance
corporate capabilities to meet today's needs and tomorrow's challenges will support our strategic
initiatives.
We shall gauge our operational performance In terms of highly ethical, safe, efficient and
responsible business practices; and in terms of market share and financial results. An even more
important measure of operational performance is the level of innovation and commitment to
continuous Improvement. This is particularly true for a company that aspires to 'get to the future
first!', as our vision proclaims. I would take this opportunity to acknowledge the wise counsel
and guidance of our Board of Management, the unwavering support of the government, the
dedication and hard work of PSO employees; and the continued trust of our customers and
business partners which we deeply appreciate and will seek to uphold.
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3.1 Highlights of Director’s Report
Future Plans
Management drives to work towards optimum performance. To promote PSO’s lubricants range in the market Strengthen the company’s balance sheet.
Plan of Acquisition
According to Director their plans include a host of different approaches which includes backward integration acquisition of refinery along with aggressive marketing strategies and focus on customer delight
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4. Auditors' Report
For the year ended June 30, 2013
We have audited the annexed balance sheet of Pakistan State Oil Company Limited ("the Company') as at June 30, 2013 and the related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof, for the year then ended and we state that we have obtained all the Information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit.
It is the responsibility of the Company's management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures In the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that:
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a) in our opinion, proper books of account have been kept by the Company as required by the Companies Ordinance, 1984;
b) in our opinion:
I) the balance sheet and profit and loss account together with the notes thereon has been drawn up In conformity with the Companies Ordinance. 1984, and are In agreement with the books of account and are further in accordance with accounting policies consistently applied;
II) The expenditure incurred during the year was for the purpose of the Company's business; and
III) The business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the Company;
c) in our opinion and to the best of our information and according to the explanations given to us, the balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable In Pakistan and give the information required by the Companies Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at June 30. 2013 and of the profit, cash flows and changes in equity for the year then ended; and
d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980) was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
We draw attention to the following matters:
• Notes 15.1 to 15.4 to the financial statements. The company considers the aggregate amount of Rs. 9456.66 million due from the Government of Pakistan respectively as good debts for reasons given In the notes;
• Note 2511 to the financial statements regarding non-accrual of mark-up on delayed payments for reasons given in the aforementioned note: and
• Note 251.2 to the financial statements regarding tax implication of Rs. 958 million on the Company
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5. Financial Ratios
Formulae 2013 2012 2011 2010 2009Profitability Ratios
1 Gross Profit ratio cogs/sales 2.82 2.86 3.52 3.32 0.422 Net Profit ratio net profit/sales 0.97 0.75 1.52 1.03 -0.933 EBITDA margin operating income/sales 2.15 2.21 3.18 3.31 -0.554 Return on Shareholders'
Equitynet profit/total equity 20.29 18.13 35.27 30.85 -32.1
5 Return on total assets net profit/total asset 4.46 2.61 5.63 4.47 -4.376 Operating Leverage
Ratiochange in EBIT/change in sale
67.46 -65.9 65.49 -2,930.77
-525.19
Turnover Ratios7 Inventory turnover ratio sales/inventories 13.3 13.05 12.66 17.67 13.968 No. of days in
Inventoryinventory*360/cogs 27 28 29 21 26
9 Debtor turnover ratio 8.79 7 8.05 8.86 12.5710 No. of days in
Receivablesnet account receivable/net sales
42 52 45 41 29
11 Creditor turnover ratio T. supplier purchases/average accounts payable
6.49 5.72 5.66 6.14 6.32
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12 No. of days in Creditors accounts payable*360/cogs
56 64 65 59 58
13 Total asset turnover ratio
net sales/total assets 4.12 3.93 4.19 4.93 5.13
14 Fixed asset turnover ratio
sales/fixed assets 226.77 200.39 155.68
130.27 98.38
15 Operating Cycle DIO+DSO-DPO 13 16 10 2 -3
Market Ratios 16 Earnings per share profit/no. of outstanding
shares50.84 52.8 86.17 52.76 -39.05
17 Price earnings ratio (P/E)
market price/EPS 6.3 4.47 3.07 4.93 -5.47
18 Dividend per share dividend/no. of outstanding shares
5 5.5 10 8 5
19 Bonus Share bonus shares/no. of outstanding shares
20 20 - - -
20 Dividend Payout DPS/EPS*100 13.77 14.2 11.6 15.16 -12.821 Dividend yield DPS/market price 2.18 3.18 3.78 3.07 2.3422 Dividend cover ratio EPS/DPS 7.26 7.02 8.59 6.58 -7.79
Capital Structure Ratios
23 Interest Cover ratio EBIT/interest ecpense 3.51 2.17 2.51 2.77 -0.8924 Financial Leverage
ratiototal debt/shareholder's equity
0.28 0.92 0.59 0.44 0.89
25 Weighted Average Cost of Debt
E/V*Re+D/V*Rd*(1-Tc)
8.78 10.62 13.69 11.16 10.36
Liquidity Ratios26 Cash to Current
Liabilitiescash+cash equivalents+invested funds/current liabilities
0.02 -0.06 -0.09 -0.05 0.09
27 Cash Flow from Operations to Sales
operating cash flow/net sales
0.06 -0.02 -0.01 0.01 -0.01
28 Current Ratio current assets/current liabilities
1.04 1.15 1.16 1.14 1.07
29 Quick Ratio current assets-inventory/current liabilities
0.55 0.85 0.72 0.79 0.75
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Solvency Ratio30 Debt Ratio total debt/total assets 0.78 0.84 0.82 0.79 0.831 Debt to Equity Ratio long term debt/equity 16.29 46.91 34.67 27.71 43.0432 Liabilities to Equity
Ratiototal liabilities/total equity
3.5 5.95 4.37 5.5 4.5
6. Horizontal and Vertical Analysis - Balance Sheet
VERTICAL ANALYSIS 2013 2012 2011 2010 2009 stainability Property. plant and equipment 1.97% 1.69% 2.33% 3.17% 4.60% NO Long term investments 17.15% 0.57% 0.88% 1.00% 1.40% NO Long term loans, advances and receivables 0.14% 0.11% 0.12% 0.16% 0.26% YESLong term deposits and prepayments 0.04% 0.04% 0.06% 0.06% 0.05% YESDeferred tax 0.94% 0.37% 36% 0.00% 3.28% YESTotal Non-Current Assets 20.25% 2.77% 3.75% 4.39% 9.60% NOOther Current Assets Stores, 0.04% 0.04% 0.06% 0.07% 0.09% YES spares and loose tools Stock-in-trade 37.71% 25.48% 36.31% 28.97% 26.53% NO % Trade debts 27.23% 62.75% 47.48% 58.10% 52.48% NOLoans and advances 0.17% 0.15% 0.16% 0.20% 0.27% YESDeposits and short term prepayments 0.86% 0.73% 0.39% 0.18% 0.36% YES Mat kup / Interest receivable 0.80% Other receivables 9.45% 6.08% 8.57% 7.20% 8.35% NOTaxation - net 1.63% 1.53% 2.40% 0.02% 0.46% NOCash and bank balances 1.86% 0.47% 0.88% 0.88% 1.88% NOTotal Current Assets 79.75% 97.23% 6.25% 95.61% 90.40% NOTotal Assets 100.00% 100.00% 100.00% 100.00% 100.00% Equity and Liabilities Share Capital 0.88% 0.49% 0.65% 0.85% 1.12% NO Reserves 21.12% 13.89% 15.30% 13.66% 12.49% NO
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Total Shareholders Equity 22.00% 14.38% 15.95% 14.51% 13.60% NOLong term deposits 0.48% 0.34% 0.39% 0.47% 0.56% YESRetirement and other service benefits 0.85% 0.72% 0.85% 0.93% 1.09% NO Total Long term Liabilities 1.33% 1.06% 1.24% 1.40% 1.65% YESTrade and other payables 70.14% 71.03% 73.04% 77.15% 71.78% YESProvisions 0.24% 0.20% 0.26% 0.34% 0.45% YESAccrued interest / mark-up 0.15% 0.16% 0.16% 0.16% 0.36% YESShort term borrowings 6.14% 13.17% 9.34% 6.44% 12.16% NOTaxes payable 0.00% 0.00% 0.00% 0.00% 0.00% YESTotal Current Liabilities 76.67% 84.56% 82.81% 84.09% 84.75% NO
100.00% 100.00% 100.00% 100.00% 100.00%
HORIZONTAL ANALYSIS 2013 2012 2011 2010 2009 sustainability Property, plant and equipment 68% 72% 75% 79% 87% NOTotal Non-Current Assets 466% 79% 81% 73% 121% NOStock-in-trade 359% 299% 323% 198% 138% NOTrade debts 563% 1603% 917% 864% 592% NOOther receivables 169% 134% 143% 92% 81% NOCash and bank balances 343% 107% 152% 117% 189% NOTotal Current Assets 359% 540% 404% 309% 222% NOTotal Assets 376% 465% 351% 271% 205% NO
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7. Vertical and Horizontal Analysis of Income statementSustainability
YES
YES
YES
YES NO
Sustainability
NO
NO
YES
NO
NO NO
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8. Cash Flow Statement
For the Year ended 30 June 2013
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9. Statement of Changes in EquityFor the Year ended 30 June 2013
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10. Pricing Chart
Sources: http://www.reuters.com/finance/stocks/chart?symbol=PSO.KA https://pkfinance.info/kse/stock/pso
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11. Conclusion
It can conclude by observation that Future of Oil and gas industry in Pakistan is looking brighter
side as it has seen in current situation its growth rate is increasing time to time
Oil and gas are two of the key components of the energy mix contributing 80% share to
the 64 million
These two segments of vigor help 77.40% to the vigor necessity of Pakistan. Pakistan has
assessed oil stores of 303.63 million barrels while its current preparation is 65,531 barrels
for every day
Over the past half century the petroleum business has assumed a critical part in national
advancement by making extensive indigenous gas revelations
While, PSO is playing a vital role to increase the significant growth of oil and gas sector
Pakistan State Oil (PSO) is the greatest Oil Marketing Company (OMC) in Pakistan with
a by and large made system, a pervasive retail framework and a common position in
bigger a piece of the thing markets with an all in all bit of the pie of 64%.
The balance sheet shows significant growing rate with little variation while, the critical
variety is broke down as accompanies: Shareholders value climbed by 24% as contrasted
with FY 2012 because of net held salary produced throughout the year. - Total non
present stakes expanded by 491% as contrasted with FY 2012 because of speculations
made in Plbs adding up to Rs. 46bn. - Current Assets diminished by 34% as contrasted
with FY 2012 fundamentally because of fall in exchange obligation adjusts by 65% by
virtue of infusion of stores by Gop to determination the issue of roundabout obligation. -
Total liabilities declined by 26% as contrasted with FY 2012 principally because of
lessening in commitments to neighborhood refineries by 83%. Their duties were settled
out of trusts appropriated from Gop throughout the present year under the roundabout
obligation settlement plan.
Therefore, cash flow statement show
A significant improvement is registered in cash flows from operating activities as compared
to previous years mainly due to significant reduction in receivables from the power sector
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entities owing to injection of funds by GoP close to financial year end, which ultimately
resulted in positive cash flows from operations of Rs. 79 bn
Cash flows from investing activities depicts a major outflow of Rs. 46 bn in comparison
to previous years due to investment made in PlBs amounting to Rs. 46bn in accordance
with the circular debt settlement plan duly approved by the ECC, GoP on June 28, 2013
Cash flows from financing activities depicts an outflow position as compared to previous
years due to repayment of short term finances owing to improvements in overall liquidity
position as a result of funds injection by GoP
However, the ratios analysis shows
In Profitability ratios The Gross Profit and EBITDA ratios have shown a
stable trend. While NP ratio has increased by 29% as compared to FY 2012
for reasons mentioned in the Profit 8, Loss segment. The return on
shareholders' equity has increased mainly due to an increase in bottom line by
39% as compared to re 2012 Which was partly offset by the impact of bonus
issues in equity. The return on total assets has increased due to the impact of
an increase In profit after tax and decline in total assets by 19% as compared
to FY 2012 duo to settlement of circular debt related receivables. The return
on capital employed has decreased as compared to FY 2012 mainly because
of Increase in capital employed due to the Impact of bonus Issue
Market ratios show As of June 30, 2013, Price earnings ratio has increased
due to improvement in investors' confidence in PSO on account of improved
profitability and settlement of circular debt issue. The dividend payout and
yield percentages are showing a declining trend as compared to FY 2012 due
to less dividend declared of Rs7 per share (including bonus) as compared to
Rs. 7.5 per share (including bonus) in FY 2012 despite increase in PAT
Liquidity ratio show Cash to Current liabilities and Cash flow from
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operations to Sales have Improved as compared to FY 2012 due to
improvement in cash flow position close to year end on account of fund
injections by GoP on June 28, 2013 to settle circular debt. In comparison to
FY 2012, the Current ratio has remained flat whereas Quick ratio has
declined due to increase in stock balances.
Vertical and horizontal analysis of balance sheet shows that
Share holder’s equity increased due to retention of profits in business to overcome
debt crises during 2009 to 2013
Trade and other payables have shown unusual increased as compared to 2007 while
the stock in trade has increased by 259% as compared to 2007
Whereas, the vertical and horizontal analysis of profit and loss accounts shows
Gross sales revenue increased from 411bn in 2007 to rs.13trillion in 2013
Gross profit has also increased in line with revenues and registered an increase of
198%
Finance cost has shown an unusual increase over the years as compare to 2007 while
total operating cost grown over the years of 172%
Profit after tax has shown increased of 168% in comparison with 2007 due to reason
mentioned above
Hence PSO have a strong grip on market which can lead to retain goodwill and increase
company’s worth