KARACHI - Pakistan State Oil Company (PSO) has reported Rs6.7 billion after tax loss in FY09 against profit after tax of Rs14 billion during FY 08, mainly due to higher financial servicing cost and the inventory losses which incurred during the first half of FY09, Irfan Qurashi, MD PSO told mediamen on Wednesday. Irfan mentioned that the PSO has serious liquidity problems owing to receivables from the IPPs (Hubco, KAPCO, PEPCO) and PIA who defaulted on payments to PSO. On 11 August 2009 outstanding dues stood at Rs78 billion, as HUBCO has the dues of Rs33,757 million, KAPCO has the outstanding amount of Rs17,237 million and WAPDA has to pay Rs24,733 million. Moreover, PIA has to pay Rs2,356 million. He added that during his meeting with the government officials, he was assured about the resolution of the debt issue by this month. PSOs financial charges during FY09 increased manifolds mainly due to heavy bank borrowings to address liquidity crunch resulting from circular debt. The Company ended up incurring Rs6.2 billion as financial charges during FY09, said the PSO MD. He further explained that the decline in the profitability of the company is mainly attributed to heavy inventory losses suffered on account of a fall in international oil prices. FY09 witnessed sharp fluctuations in international oil prices which touched the highest level of $141/barrel in July 2008 against the lowest level of $33 in December 2008. The company registered Rs18.9 billion on account of net inventory losses during FY09 as compared to inventory gains of Rs11 billion during FY 08. In addition to inventory losses, Pak rupee devaluation of 19% against US$ severely hampered the profitability of the company, as more than 80% of oil product imports in the country are carried out by PSO. During FY09, the companys sales revenue touched Rs719 billion as compared to Rs583 billion in the corresponding period last year mainly due to the reliance of power sector on PSO for supply of Furnace Oil as other suppliers in the market shied away due to circular debt problem. During FY09, PSO sold 13.2 million tons of POL products as compared to 13 million tons during the preceding year. The company was able to sustain its sales volumes and market share despite the overall economic slowdown and decline in petroleum products consumption in the white oil segment. PSO ended FY09 at an overall market share of 71.3% as compared to 70.5% during FY08. He mentioned that in Black Oil, PSOs sales volume grew by over 10.2% which enabled the company to enhance its market share appreciably from 82.3 % in FY08 to 85.8% in FY09. This actually demonstrates companys ability to meet the rising FO demand from the power sector. During the FY09, despite a negative growth of 9.1% in sales volumes of White Oil, PSO continued its market leadership with 59.4% market share. The decrease in white oil volumes was mainly due to the overall economic downturn in the country which resulted in a 5.3% decline in industrial volumes as well. The 2nd half performance of the company during FY09 shows a positive picture primarily due to stabilised oil prices at the level of $ 60-70 per barrel. As a result of steady oil prices, the company was able to post improved after tax earnings of Rs781 million during the 3rd quarter and Rs2,571 million during the 4th quarter as compared to the losses incurred during the 1st and 2nd quarters of FY09. The total dividend for the year stood at Rs 5/- per share translating into a total payout of Rs 0.86b to the shareholders. PSO management made all out efforts throughout FY09 for recoveries from these entities to ensure availability of products in the country. As a result, the company during the financial year 2008-09 received Rs167b from the power sector and Rs39b PDC from the Government of Pakistan.