PSO, Attock Petroleum profits jump 144% to PKR 32.2bn

Pakistan State Oil (PSO) and Attock Petroleum Limited (APL) recorded a combined 144% increase in earnings to PKR 32.2 billion in the first quarter of fiscal year 2026-27, driven by higher petroleum prices, stronger sales and inventory gains, according to a report by Arif Habib Limited (AHL).

The report said the two companies' combined sales rose 18% to PKR 1.007 trillion during July-September, while gross profit increased 84% to PKR 69.3 billion.

Their combined gross margin stood at approximately 6.9%, supported by estimated inventory gains of PKR 43 billion. Inventory gains occur when companies benefit from selling fuel purchased or held at lower prices after market prices rise.

Average petrol prices increased 32.5% from a year earlier to PKR 348.95 per liter, while high-speed diesel prices rose 43.5% to PKR 385.56 per liter.

AHL attributed the increases to higher ex-refinery prices amid geopolitical tensions involving the United States and Iran, which pushed up international petrol and diesel prices.

Industry petroleum sales volumes rose 6% from a year earlier during the quarter. Petrol sales increased 4%, while high-speed diesel dispatches declined 3%.

PSO outperformed the broader industry, with petrol volumes rising 25% and diesel volumes increasing 12%, the report said.

PSO's market share increased to 46.4% from 41.8% a year earlier, a gain of 4.6 percentage points. APL's share rose by 0.45 percentage points to 8.8%.

How did PSO and Attock Petroleum perform?

PSO reported unconsolidated earnings of PKR 25.6 billion, or PKR 54.44 per share, up 172% from a year earlier, supported by higher sales, improved gross margins and estimated inventory gains of PKR 35 billion.

Its sales increased 15% to PKR 846.1 billion, reflecting higher petroleum prices and sales volumes.

The company's finance costs rose 6% to PKR 6.3 billion, which AHL attributed to higher short-term borrowings and interest rates.

PSO's receivables, or money owed to the company, increased by PKR 1.5 billion from the previous quarter to PKR 416 billion in September. However, they remained PKR 132 billion below their December 2023 level.

APL posted earnings of PKR 6.6 billion, or PKR 53.36 per share, up 74% from a year earlier.

Its sales increased 36% to PKR 160.5 billion, supported by higher petroleum prices. AHL attributed the earnings growth to higher prices, inventory gains and other income.

APL's gross margin improved to 7.4% from 6.4%, reflecting estimated inventory gains of PKR 8 billion during the quarter.

Its net finance income edged down to PKR 906 million from PKR 922 million a year earlier.

AHL calculated the combined effective tax rate for the two companies at 37.6%.

LNG supplies decline amid disruptions

Pakistan's liquefied natural gas (LNG) segment also faced supply disruptions during the quarter, with eight cargoes handled compared with 28 in the same period last year, according to AHL.

PSO accounted for three cargoes during the quarter.

The delivered ex-ship LNG price increased to USD 11.09 per million British thermal units from USD 8.01 a year earlier.

AHL attributed the decline in cargoes and higher prices to geopolitical tensions affecting energy supplies.