FLASHNEWS:

AKD Securities Limited – AKD Daily (February 09, 2022)

Karachi, February 09, 2022 (PPI-OT): PSO: 2QFY22 Result Preview

Pakistan State Oil (PSO) is expected to announce its 2QFY22 result on 11th Feb’22 where we expect the company to post PAT of PkR10.8bn (EPS: PkR22.96), increasing by 146%YoY as low inventory gains kept the base low.

Company’s revenue is expected to increase by 136%YoY as retail prices increased coupled with increase in dispatches which stood at 13.5%YoY. For the retail fuel segment, company’s volumes increased by 13%YoY.

PSO has remained in limelight recently with the stock outperforming KSE-100 index by 2ppts in last two weeks as oil prices remain elevated, increasing expectations of significant inventory gains. Another factor which contributed to the cause was IMF requesting government to take steps to curtail circular debt of not only power sector, but gas too.

Overall, we maintain our Buy stance on the scrip with our TP of PkR250.4/sh providing an upside of 29% premised upon company continuing to improve its retail infrastructure which has resulted in company’s retail fuel market share increasing to 47% for 7MFY22 against 44% for 7MFY21.