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xpertwriter's review
Investment Sector: IPO / Secondary Offering Submitted by Xpertwriter 
, CEO At E-HostingJunction.com
at Spectrum Resumes , Inc
9 months ago Tags: companies shell PSO Oil Add Tag |
PSO and Shell Enjoy Robust Profits
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The PSO is expected to post robust earnings of Rs3.0 billion, with earning per share of Rs17.2) during 3rd Quarter of FY08. This is mainly due to huge after tax inventory gains of Rs647 million, earning per share (EPS impact of Rs4.0) on diesel likely during 3QFY08. Resultantly, its expect PSO to post 9MFY08 net profits of Rs8.4 billion, with earning per share of Rs49.2) versus Rs2.1 billion and earning per share of Rs12.5) in 9MFY07 - an increase of 294 percent Year-on-Year. Analyst expects net sales to reach at Rs335 billion in 9MFY08 versus Rs248 billion in 9MFY07, increase of 35 percent Year-on-Year. Moreover, amid rise in both white and black oil margins coupled with huge inventory gains on FO & HSD, PSO’s gross margin is likely to be at 5 percent in 9MFY08 versus 2.7 percent previously.
Shell is likely its 3rd Quarter FY08 earnings of Rs838 million, with earning per share of Rs15.3) as compared to earnings of Rs149 million, with earning per share of Rs2.7 last year. As a result, its expect 9MFY08 earnings of the company to reach Rs2.5 billion, with earning per share of Rs46.1 versus loss of Rs220 million (negative EPS Rs4.1) in 9MFY07. Analyst expects net sales of the company in 9MFY08 to reach Rs96 billion versus Rs84 billion, an increase of 14 percent Year-on-Year.
Shell’s gross margin is likely to reach 9.4 percent during 9MFY08 versus 4.6 percent last year, an increase of 480bps. This is expected primarily due to huge inventory gains on diesel and 11 percent Year-on-Year rise in volume sales during 9MFY08 versus last year.
Alone in Mar 2008, local ex-refinery diesel (HSD) price has gone up by Rs7.7 per liter (i.e. by 17%) mainly due to upward trend in international diesel oil prices, analyst said. Earlier they were expecting Rs3.1 per liter rise in diesel price in the month under review.
However, with record increase in international diesel prices, local OMCs are likely to incur inventory gains higher than our earlier estimate.
Beside inventory gains, recent increase in retail diesel prices has also raised diesel margin by 17 percent per liter, benefiting OMCs in 3rd Quarter of FY08.
Government is still giving Rs19/liter subsidy on diesel which is a concern for OMCs as far as their cash flows are concerned. Since with diesel subsidy, OMCs’ cash flows get affected due to their mounting receivables from Government of Pakistan.
As a result, they are forced to borrow funds from banks for plugging their working capital gap, resulting in higher financial charges. To manage cash flows, however, there are chances that OMCs might have reduced average days of inventory, they maintained.
Shell is likely its 3rd Quarter FY08 earnings of Rs838 million, with earning per share of Rs15.3) as compared to earnings of Rs149 million, with earning per share of Rs2.7 last year. As a result, its expect 9MFY08 earnings of the company to reach Rs2.5 billion, with earning per share of Rs46.1 versus loss of Rs220 million (negative EPS Rs4.1) in 9MFY07. Analyst expects net sales of the company in 9MFY08 to reach Rs96 billion versus Rs84 billion, an increase of 14 percent Year-on-Year.
Shell’s gross margin is likely to reach 9.4 percent during 9MFY08 versus 4.6 percent last year, an increase of 480bps. This is expected primarily due to huge inventory gains on diesel and 11 percent Year-on-Year rise in volume sales during 9MFY08 versus last year.
Alone in Mar 2008, local ex-refinery diesel (HSD) price has gone up by Rs7.7 per liter (i.e. by 17%) mainly due to upward trend in international diesel oil prices, analyst said. Earlier they were expecting Rs3.1 per liter rise in diesel price in the month under review.
However, with record increase in international diesel prices, local OMCs are likely to incur inventory gains higher than our earlier estimate.
Beside inventory gains, recent increase in retail diesel prices has also raised diesel margin by 17 percent per liter, benefiting OMCs in 3rd Quarter of FY08.
Government is still giving Rs19/liter subsidy on diesel which is a concern for OMCs as far as their cash flows are concerned. Since with diesel subsidy, OMCs’ cash flows get affected due to their mounting receivables from Government of Pakistan.
As a result, they are forced to borrow funds from banks for plugging their working capital gap, resulting in higher financial charges. To manage cash flows, however, there are chances that OMCs might have reduced average days of inventory, they maintained.
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