Page 91 - Pakistan Oilfields Limited - Annual Report 2021

ANALYSIS OF PERFORMANCE

INDICATORS

Profitability ratio Economic Value Added (EVA)

The overall profitability (gross profit, net profit, Rs in million
EBITDA, ROE, and ROCE) have seen decline 2021 2020
mainly due to lower other income and higher Net profit after tax 13,382 16,376
taxes during the year. Invested capital 39,362 40,267

Liquidity ratio WACC 16.03% 15.83%
EVA 7,071 10,000
The overall liquidity ratio of POL is satisfactory
and the Company has sufficient cash and bank The above outcomes in 2021 in EVA means that
balances.In the current as well as last year, the Company is creating value with its invested
net cash flows from operating and investing capital. Decrease in the current year’s profit
activities is positive. Slight decrease in ratio is mainly due to lower other income (due to
from the previous year is mainly because of lower markup rates and higher exchange loss
lower receipts from customers and higher taxes on foreign currency bank balances) and higher
paid. taxes.

Activity / turnover ratios Free cash flows

POL has seen effective utilization of its assets
Rs in million
base to generate high multiples of revenue 2021 2020
consistently. Operating cycle has been Cash flows from
effectively kept in range by minimal credit sales operating activities 19,479 23,263
and improved collection of receivables. Capital expenditure 1,733 6,737

Investment / market ratios Free cash flows 17,746 16,526

POL core objective is to generate consistent Free cash flows for the current year increased
high returns for its valued shareholders. This due to less capital expenditure. Cash flow from
is reflected in steady increase in earnings of operating activities decreased mainly due
past years and consistent dividend to its valued to less receipts from customers and higher
shareholders. payment of taxes.

POL shares are highly valued by investors and is
considered as blue chip investment due to high
price earnings ratio.

ANNUAL REPORT 2021 89