Pakistan State Oil
|پاکستان اسٹیٹ آئل|
|Traded as||KSE: PSO|
|Industry||Oil and gas|
|Founded||January 1, 1974
30 December 1976 (as PSO)
(Managing Director and CEO)
|Products||Motor gasoline (Mogas), high-speed Diesel (HSD), furnace oil (FO), jet fuel (JP-1), kerosene, CNG, petrochemicals and lubricants|
|Revenue||U.S. $14 billion (1.4 trillion PKR) (2014)|
|U.S. $408 million (42.0 billion PKR) (2014)|
|Profit||U.S. $212 million (21.8 billion PKR) (2014)|
|Total equity||~ 100 billion PKR (2014)|
Number of employees
Pakistan State Oil (Urdu: پاکستان اسٹیٹ آئل; reporting name: PSO) is a Karachi-based Pakistani state-owned multinational petroleum corporation involved in marketing and distribution of petroleum products. It has a network of 3,689 filling stations, out of which 3,500 outlets serve the retail sector and 189 outlets serve bulk customers.
It controls a market share of over 60% of the total oil market with customer portfolio including dealers, government agencies, autonomous bodies, independent power projects and other corporate customers. It is involved in import, storage, distribution and marketing of a range of petroleum products including gasoline, diesel, fuel oil, jet fuel, LPG, CNG and petrochemicals.
It was founded on December 30, 1976, after Pakistan's government took over the management of Pakistan National Oil (PNO) and Dawood Petroleum Limited and renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products. PSO is the first public company in Pakistan to pass the PKR 1 trillion revenue mark.
Its primary listing is on the Karachi Stock Exchange and it is a constituent of the KSE-30 Index. PSO has been named among the Forbes Global 2000 continuously over the years. Its revenues in 2014 stood at PKR 1,410 billion ($ 14 billion) and after-tax profit stood at PKR 21.8 billion ($ 210 million). The company's market capitalization is greater than PKR 100 billion.
The creation of Pakistan State Oil (PSO) can be traced back to the year 1974, when on January 1; the government took over and merged National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL).
Soon after that, on 3 June 1974, Petroleum Storage Development Corporation (PSDC) came into existence. PSDC was then renamed as State Oil Company Limited (SOCL) on August 23, 1976. Following that, the ESSO undertakings were purchased on 15 September 1976 and control was vested in SOCL. The end of that year (30 December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited, giving way to Pakistan state Oil (PSO).
After PSO’s inception, the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004. This program over the years included the revamping of the organizational architecture, rationalization of staff, employee empowerment and transparency in decision making through cross functional teams. This new corporate renewal program has divided the company’s major operations into independent activities supported by legal, financial, informative and other services. Inorder to reinforce and monitor this structural change, related check and balances have been established by incorporating monitoring and control systems. Due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies, PSO has been able to maintain its market leadership in a highly competitive business environment.
The company has the most extensive retail network among all OMC's in the country with 3,557 retail outlets out of which 1,776 outlets have been upgraded with enhanced facilities as per New Vision Retail Outlet (NVRO) standards. The first OMC to commission a Compressed Natural Gas (CNG) facility in January 1996, PSO has 251 CNG stations operational in more than 34 cities and towns across Pakistan. It is also the Largest Fuel Oil Supplier to the Energy Sector across Pakistan including Independent Power Producers (IPPs) and Gencos. With 9 installations and 23 depots, PSO can store approximately 1 million metric tons which represents 74% of the nation's total storage capacity. The Company provides fuel to 9 airports nation-wide as well as the 2 major sea ports in Pakistan. As part of its Non-Fuel Retail (NFR) initiatives, PSO has more than 150 Shop Stops at its retail outlets across Pakistan which provide customers with round the clock service and convenience. PSO operates a fleet of 24 Mobile Quality Testing Units (MQTUs)which carry out regular inspections at its retail outlets, industrial consumer sites, installations and depots to ensure product quality.
Based on its business performance, Pakistan State Oil (PSO) was listed among the world’s biggest publically traded companies on Forbes 2000 list in FY2014. Companies on this list are measured by Forbes 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 FY2014 PSO recorded all time high sales revenue, operating profit, after tax earnings and market capitalization. Sales revenue stood at Rs 1.4 trillion compared to Rs 1.29 trillion during the Same Period Last Year (SPLY), registering a growth of 9%. After tax earnings rose by 73% to Rs 21.8 billion as compared to Rs 12.6 billion during SPLY. Earnings per share increased to Rs 80.31 from Rs 46.52 during SPLY.
PSO maintained its market leadership position during the year under review with 73% share in Black Oil market and 53% in White Oil market, while registering a growth of 5% in sales over liquid fuels last year.
PSO developed and focused on a business model which highlighted the importance of due diligence and implemented a strategy to pursue profitable growth while rationalizing its product portfolio. The Company merged critical aspects of both internal financial review and external market reconnaissance to strike an effective balance between volumetric sales and profitability. During the year marketing, distribution and administrative expenses increased by 3% against an average increase of 14% during the last 3 years and against inflation of 8.5% during the year.
PSO is listed on all major stock exchanges of Pakistan including the Islamabad, Lahore and Karachi exchanges. During FY2014 PSO surpassed the Rs 100 billion mark of market capitalization resulting in the Company becoming one of Pakistan's few "large cap" companies. The Company's outlook has been upgraded by Pakistan Credit Rating Agency(PACRA) from ‘Stable’ to ‘Positive’ with AA+ and A1+ long-term and short-term credit ratings.
Corporate Social Responsibility
PSO ascertains the effectiveness of the CSR initiatives in terms of their value addition to business and to societal development (value for employee and community at large), as below:
- Traditional charity / philanthropy also referred to as Donation, has significant social value addition but low shareholder value addition.
- Compliance with regulation has low social value addition and low shareholder value addition.
- Risk management (controlling cost and liabilities) has low social value addition and high shareholder value addition.
- Socially responsible innovation has high social value addition and high shareholder value addition. (an innovation has a marketing value, so every novelty is not an innovation).
During FY2014, PSO made all time high contribution towards CSR including contribution of 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 cause. PSO also extended support to the populace affected and displaced by floods and earthquakes by providing relief items to meet their nutritional and shelter needs. Besides, the Company is extendeding active support and donations to a wide range of more than thirty organizations engaged in development and humanitarian support efforts in the fields of health, education and community building.
- Official website
- [PSO Annual Report 2014|http://psopk.com/investors/pdf/PSO_Annual_Report_new_2014.pdf]