Karachi February 29 2024: Pakistan Petroleum Limited collection from customers improved to 73 percent from 53 percent a year ago, according to company latest financial report.
Share price of the company gain PKR 4.51 or 4.16 percent in today trading at Pakistan Stock Exchange.
“The Company has experienced a commendable enhancement in collections from customers, resulting in improved collection ratio of 73 percent (53 percent during the corresponding period), i.e., PKR 129 billion were recovered in HY 2023-24 versus PKR 91 billion in HY 2022-23. Despite this favourable development, the escalation in trade debts was kept at approximately 9%, signifying a prudent management of trade debts” states Pakistan Petroleum Limited in its financial report.
The upturn in collections can be attributed to the implementation of increased consumer gas prices, which took effect in January 2023 and November 2023. This strategic adjustment has contributed to a deceleration in the accumulation of circular debt, thereby bolstering the Company’s financial resilience.
It is imperative, however, to continue to monitor consumer gas prices in alignment with wellhead gas price adjustments to preempt any future resurgence of circular debt. Subsequent to the period end, another consumer gas price increase has been notified by OGRA, which is expected to further improve the gas collections.
Profitability increased by around 41 percent to PKR 68.8 billion in 1HFY24 as compared to the corresponding period. The main drivers are increase in sales revenue (as explained above) and significantly lesser tax charge, partially offset by higher operating expenses amid inflationary impacts and share of loss of associates.
Tax charge significantly declined amid reversal of prior years’ tax provision pursuant to favourable decision of the Honourable Supreme Court of Pakistan (SCP) in respect of calculation of depletion allowance on well-head value. In the judgment, the SCP decided that royalty paid by taxpayer is a separate component and not to be deducted while calculating well-head value for the purpose of depletion allowance. Accordingly, the Company based on the aforesaid judgment reversed the provision amounting to PKR 14,335 million pertaining to tax years 2003 till 2023 in respect of royalty effect of depletion allowance.
