Pakistan State Oil profit rises 63% on tax

Pakistan State Oil Ltd, the nation's biggest fuel retailer, said profit in the year ended on June 30 jumped 63 per cent after the government reversed a tax increase and crude oil prices climbed. Net income in the 12 months rose to Rs14.8 billion (Dh630 million), or Rs86.17 a share, from Rs9 billion, or Rs52.76, a year earlier, the Karachi-based company said in a statement to the stock exchange Tuesday. Sales gained 11 per cent to Rs974 billion. The company plans to pay a final cash dividend of 2 rupees per ordinary share for the year. The government reversed a decision to double a tax on sales of fuel distribution companies to 1 per cent three months after imposing it in July. Prime Minister Yousuf Raza Gilani rolled back the fuel-price increase after a coalition partner quit in protest. Article continues below The company paid Rs3 billion in taxes this year, versus Rs8.9 billion in the previous 12 months. A 25 per cent increase in crude oil prices in the period also helped boost the retailer's profit, said Khurram Schehzad, head of research at Karachi-based Invest Capital Markets Ltd that rates the stock a "buy". The South Asian nation, which imports about 85 per cent of the oil it uses domestically, reviews domestic fuel prices regularly to reflect movements in the global markets. Pakistan raised gasoline prices three times during the year under review. Pakistan State Oil shares fell 4.5 per cent to Rs205.67 as of 2:21pm local time, on course for its lowest level since June 8, 2009, on the Karachi Stock Exchange. It extended its losses this year to 30 per cent.