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  • Dec 30th, 2014
  • Comments Off on Pakistan State Oil becomes Forbes 2000 Company
Based on extraordinary business performance, Pakistan's oil market leader and flagship national company - Pakistan State Oil (PSO) joined the globally prestigious club of world's biggest publically traded companies on Forbes 2000 list. For this purpose, Forbes screens the companies in four metric: sales, profits, assets and market value with a minimum cut off value in order for a company to qualify. In terms of revenue in comparison with that of US Fortune 500 companies, PSO as Pakistan's largest company in terms of turnover would rank around 211th.

During the Financial Year ended June 30, 2014, (FY 2014), PSO recorded all time high sales revenue, operating profit, after tax earnings and market capitalisation. The Company's profitability growth during the year has also been the highest in its operating history. PSO crossed Rs 100 billion mark of market capitalisation to be one of the few Rs 100 billion plus 'large cap' companies of the Karachi Stock Exchange, and its Outlook was upgraded by PACRA from 'Stable' to 'Positive' with AA+ and A1+ long-term and short-term credit ratings.

These all time high performance benchmarks were achieved by PSO without any increase in margins during the year and despite higher finance cost borne by the Company owing to higher power sector receivables during the year. To manage this situation, the Company optimised the sales of its products to strike an effective balance between growth and profitability while realising substantial cost efficiencies in administration, distribution, and marketing; limiting increase in expenses in this regards to 3% as compared with 14% average increase in expenses over the last three years and against an inflation of 8.5% during FY 2014.

As one of the largest taxpayers in Pakistan, PSO made its highest ever contribution of Rs 289 billion to the Government exchequer in the form of duties and taxes during FY 2014, which was 10% higher than that made during the previous year.

During FY 2014, the Company successfully met the challenge of timely and continuous supply of fuel oil for electricity generation despite the circular debt issue vis-a?-vis huge receivables from the power sector by efficiently managing the supply chain, inventory and finances.

During the year, the Company improved its refining base by increasing equity stake in Pakistan Refinery Limited from 18% to 22.5% and completed the ground work for diversifying into LNG import business by developing the structure for the LNG project in consultation with all stakeholders.

Various system based controls were introduced and a number of business functions were automated during the year. SAP system was upgraded, enabling the Company to utilise new features available in Enterprise Core Component Version 6 leading to improved ERP utilisation (by 15%), cost efficiency, reporting integration and information reconciliation.

An Online Order Management System (OOMS) was implemented, enabling PSO's customers to login to their e-portals and place orders for products, make payments and view accounts status. This system helped PSO to reduce operational cost, enhance controls, eliminate potential irregularities due to human intervention, and improve payment collection by establishing online connectivity with the banking network across the country.

During the year, a human resource development initiative for capacity building and leadership development was launched by signing an MoU with Suleman Dawood School of Business (SDSB) of the Lahore University of Management Sciences (LUMS). An internship program for the students of universities across Balochistan was also launched.

As a responsible corporate citizen, PSO is committed to fulfilment of its responsibility towards the society, with a particular focus on supporting the distressed and deprived segments of society. The Company accordingly made all time high contribution towards CSR and supports promotion initiatives during FY 2014. PSO contributed Rs 40 million to the Prime Minister's Relief Fund for the Internally Displaced Persons from North Waziristan in addition to donating a portion of its employees' salaries for this noble cause. PSO also extended support to fellow citizens affected and displaced by floods by providing relief items to meet their nutritional and shelter needs in the month of October 2013. PSO dispatched a relief convoy containing 25,000 mineral water bottles, 1800 ration bags, 1000 mosquito nets and 270 tents. These items were distributed amongst various relief camps in the vicinity of Awaraan, Balochistan. Besides, the Company extended active support and donations to a wide-range of more than thirty organisations engaged in development and humanitarian support efforts in the fields of health, education and community building, which include Child Aid Association, SOS Children's Village, Sindh Institute of Urology and Transplantation (SIUT) and Fatimid Foundation, among others. PSO has also extended support to Pakistan Hockey Federation and will act as a sponsor for various domestic hockey tournaments organized by PHF to promote hockey as national sport in Pakistan.

PSO realises that in addition to being directly accountable to its shareholders, it is responsible to a wide group of stakeholders for supporting sustainable development and expanding economic opportunity.

Copyright Business Recorder, 2014

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