Corporate results: Pakistan Oilfields posts below par profit

Earnings deviation is primarily driven by higher taxation and well costs: analysts.


Our Correspondent February 02, 2012

KARACHI: Pakistan Oilfields has posted below par results of an 18% increase in profits to Rs6.2 billion for the period from July to December 2011.

The result is at least 13% lower than estimated earnings as analysts expected net profit to stand, on average, around Rs7 billion. Attock Group‘s oil and gas exploration wing did still put in a healthy performance, added analysts.

Earnings deviation is primarily driven by higher taxation during the period under review coupled with a pile up in well costs that resulted in a decline in quarterly profits, according to analysts.

The company’s tax cut increased by a whopping 65% to Rs3.2 billion in the first half of fiscal 2012 against Rs2.0 billion in the same period a year ago.

Alongside the result, the board of directors in a meeting held in Dubai announced an interim payout of Rs17.5 per share.

Increase in earnings was primarily on account of increase in company’s net sales due to 37% higher international oil prices and improved production particularly from Tal block, said Topline Securities analyst Nauman Khan.

Net sales rose 25% to Rs14.5 billion during the period under review against the preceding year’s Rs12.6 billion. “51% increase in other income to Rs1.6 billion because of improved cash position along with higher dividend payout by associate companies including National Refinery and Attock Petroleum also helped the bottom-line,” added Khan.

Exploration cost fell 56% to Rs132 million on account of a drop in exploration activity.

Well cost

Higher amortisation of development and decommissioning costs stood at Rs731 million against estimates of Rs275 million. Higher charges are likely related to asset impairment testing on Domail well.

This rendered into 102% increase in the amortisation to Rs1.0 billion of half-yearly results.

Hence, quarterly profits fell 9% to Rs2.71 billion in October to December against Rs3.0 billion in the same period a year ago.

Published in The Express Tribune, February 3rd, 2012.

 

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