Karachi: Pakistan State Oil Company (PSO) announced a substantial loss of Rs23.1 billion for the fourth quarter of fiscal year 2026, translating to a loss per share of Rs49.1. This marks a stark contrast to the Rs5.6 billion profit, or earnings per share of Rs12.0, reported for the same period in the previous year. The loss was notably higher than industry expectations, primarily due to significant inventory losses and a resulting gross loss for the quarter.

According to JS Global, the company's earnings for the entire fiscal year 2026 fell to Rs15.1 billion, a 28% decline from the Rs20.9 billion recorded in fiscal year 2025. Despite net sales remaining relatively unchanged year-on-year at Rs809 billion, PSO reported a gross loss of Rs33.7 billion in the fourth quarter, compared to a gross profit of Rs23.4 billion in the same period last year. The decline in gross profitability was largely attributed to inventory losses amid a reduction in retail fuel prices and decreased volumes of motor spirit and diesel.

The company reported an 8.5 billion rupee reversal in other expenses for the fourth quarter, which brought the total other expenses for the year to Rs6 billion, a 47% increase from the previous year. Finance costs also rose by 22% year-on-year to Rs8.4 billion, driven by a 33% increase in bank borrowings to Rs384 billion. Additionally, PSO recorded a tax credit of Rs15.3 billion for the fourth quarter, compared to a tax expense of Rs8.8 billion in the same quarter of the previous year.

PSO's balance sheet indicates a reduction in trade debts to Rs415 billion in the fourth quarter of FY26 from Rs455 billion in the third quarter. The company declared a final cash dividend of Rs10.0 per share for FY26, maintaining the same level as the previous year. Despite the challenging quarter, the company reiterated its BUY recommendation for the stock.