Pakistan State Oil posts loss as fuel inventory value falls
Thursday, 13 August 2009
KARACHI, Aug. 12 (Bloomberg): Pakistan State Oil Ltd., the nation's biggest fuel retailer, posted a full-year loss as declining prices eroded the value of its inventory.
The net loss in the year ended June 30 was 6.69 billion rupees ($80.8 million), or 39.05 rupees a share, compared with a net profit of 14.1 billion rupees, or 81.94 rupees, a year earlier, the Karachi-based company said in a statement to the stock exchange today. Sales rose to 719.3 billion rupees, from 583.2 billion rupees.
The company had bought refined fuel when crude prices were at a high at the start of the financial year in July 2008, said Rehan Khan, research analyst at First Capital Equities Ltd., in Karachi, who has a "buy" recommendation on the stock. When crude prices fell and fuel prices declined, the company was hit because it had bought the fuel at higher rates, he said.
The price at which fuel retailers bought petrol from refiners fell to 25,564 rupees a ton in December from a high of 88,482 rupees a ton in July 2008, according to First Capital. Fuel prices in Pakistan are set in accordance with international crude rates.
Crude prices in New York have plunged to $69.89 a barrel on June 30 from $140.97 a barrel on July 1, 2008, as the U.S., Europe and Japan face their first simultaneous recession since World War II.
Pakistan State also recorded a loss because of higher financial costs, Khan said. The fuel retailer borrowed more from banks to bridge a shortfall caused by 56 billion rupees in delayed payments for fuel purchases by state-run power producers, he said.
The company's loan costs rose to 6.23 billion rupees in the year ended June 30, from 1.37 billion rupees a year earlier.
State Oil's shares fell 1.3 per cent to 258.10 rupees as of 1:23 p.m. local time on the Karachi Stock Exchange. The stock has increased 88 per cent this year.
Pakistan State Oil sells diesel, fuel oil, jet fuel, lubricants and compressed natural gas through 3,612 outlets and has 61 per cent of the refined oil market share and 81 per cent in crude oil sales, according to the company's Web site.
The net loss in the year ended June 30 was 6.69 billion rupees ($80.8 million), or 39.05 rupees a share, compared with a net profit of 14.1 billion rupees, or 81.94 rupees, a year earlier, the Karachi-based company said in a statement to the stock exchange today. Sales rose to 719.3 billion rupees, from 583.2 billion rupees.
The company had bought refined fuel when crude prices were at a high at the start of the financial year in July 2008, said Rehan Khan, research analyst at First Capital Equities Ltd., in Karachi, who has a "buy" recommendation on the stock. When crude prices fell and fuel prices declined, the company was hit because it had bought the fuel at higher rates, he said.
The price at which fuel retailers bought petrol from refiners fell to 25,564 rupees a ton in December from a high of 88,482 rupees a ton in July 2008, according to First Capital. Fuel prices in Pakistan are set in accordance with international crude rates.
Crude prices in New York have plunged to $69.89 a barrel on June 30 from $140.97 a barrel on July 1, 2008, as the U.S., Europe and Japan face their first simultaneous recession since World War II.
Pakistan State also recorded a loss because of higher financial costs, Khan said. The fuel retailer borrowed more from banks to bridge a shortfall caused by 56 billion rupees in delayed payments for fuel purchases by state-run power producers, he said.
The company's loan costs rose to 6.23 billion rupees in the year ended June 30, from 1.37 billion rupees a year earlier.
State Oil's shares fell 1.3 per cent to 258.10 rupees as of 1:23 p.m. local time on the Karachi Stock Exchange. The stock has increased 88 per cent this year.
Pakistan State Oil sells diesel, fuel oil, jet fuel, lubricants and compressed natural gas through 3,612 outlets and has 61 per cent of the refined oil market share and 81 per cent in crude oil sales, according to the company's Web site.