Karachi: Pakistan State Oil (PSO) and Fauji Cement Company Ltd. (FCCL) announced their financial results for FY24 today, revealing substantial year-over-year earnings growth and unexpected dividend payouts. PSO recorded a significant increase in profits, attributed to a surge in other income, while FCCL reported its highest annual earnings due to increased cement prices and expanded capacity.

According to AKD Securities Limited, PSO reported a Profit after Tax (PAT) of PKR 15.9 billion for FY24, marking an 180% increase from the previous year, significantly above estimates. The company’s notable rise in other income, particularly in the final quarter, contributed to this growth, alongside improved gross margins and reduced finance costs. PSO also announced a final dividend of PKR 10 per share. For FCCL, the fourth quarter showed a robust increase in earnings to PKR 1.2 billion, driven by a 20% rise in offtakes and a 13% increase in cement prices. Despite higher financial charges and a substantial tax charge, the company declared a surprise final dividend of PKR 1.0 per share.

PSO’s quarterly Net Profit After Tax (NPAT) stood at PKR 2.5 billion, down 56% from the previous quarter, with a sharp increase in other income potentially linked to late payment surcharges related to circular debt receivables. The company’s gross margins for the quarter were 1.93%, with an estimated PKR 7.9 billion in inventory losses due to falling refinery prices. Financial costs decreased by 21% both quarterly and yearly due to improved liquidity and falling financing rates.

FCCL’s performance was bolstered by a 28% year-over-year increase in topline revenues, reaching PKR 20.6 billion, attributed to enhanced capacity and higher cement prices. Gross margins improved to 36.2%, while operating expenses rose by 23%, reflecting increased export volumes and the impact of axle load regulations. The elevated tax rate for the quarter stood at 74%, significantly affecting net earnings.

Both companies have demonstrated resilience and growth in a challenging economic environment, with strategic expansions and pricing adjustments aiding their performance. AKD Securities maintains a ‘Buy’ rating on both stocks, with a June ’25 target price of PKR 290 per share for PSO and PKR 30 per share for FCCL, indicating substantial upside potential from their last close.