Corporate results: OGDC profits jump 32% to Rs41.57 billion

The result was 7% below market expectation according to analysts.

KARACHI:

Oil and Gas Development Company (OGDC) profits jumped 32% to Rs41.57 billion during July to December 2011 on the back of higher revenue.

The result was 7% below market expectation as analysts expected net profit of the country’s largest oil and gas explorer to be, on average, Rs43.2 billion.

Net sales growth clocked in at 9% to Rs88.6 billion backed by higher realised prices and improving gas volumes. International oil prices rose 37% to an average of $109 per barrel during the first half of fiscal 2012, helping net sales grow.

Gas production rose by 3.72% while net crude oil production declined by 2.89% during the period under review, according to data released by the company.

The company contributes 25% to the total gas production and 57 per cent to the total oil production of the country.

Moreover, the company announced a second interim dividend of Rs1.5 per share, taking the total payout to Rs3 per share in fiscal 2012 so far.

Exploration expense almost halved to Rs1.78 billion in the first half of fiscal 2012 against Rs3.54 billion in the same period last year as a result of lower drilling activity this year. The explorer spudded seven wells comprising one exploratory and six development wells. The exploratory efforts resulted in two oil and gas discoveries during the period under review. Operating expenses increased 24% to Rs15.4 billion in the first six months of financial year 2012, of which sequential operational expenditure for the last three months came at Rs8.2bn, up 27% on a quarterly basis.

Other income surged more than four-folds to Rs4.62 billion on account of higher return on rising cash balances. Company’s liquid assets increased to Rs55 billion in the first quarter of the current financial year against just Rs21 billion in the same period last year.

The company stock price eased Rs3.53 to close at Rs162.69 during trade at the Karachi Stock Exchange on Thursday as investors expected a slightly higher payout.

Published in The Express Tribune, February 24^th, 2012.