Corporate results: POL racks up Rs2.2 billion in profit, up 10%

EPS improves to Rs9.2 during third quarter of ongoing fiscal year

Our Correspondent April 13, 2016

KARACHI: Pakistan Oilfields Limited (POL) on Wednesday announced a net profit of Rs2.2 billion for the third quarter of fiscal year 2015-16, up 10% compared to Rs2 billion in the same period last year, according to a company notice sent to the Pakistan Stock Exchange (PSX).

Earnings per share (EPS) improved to Rs9.2 from an EPS of Rs8.5 in the period under review.

“This result was above market’s consensus estimates,” commented Topline Securities.

KSE 100-Index gained 29 points and closed at 33,646 on Wednesday, while the share price of POL jumped 4% to close at Rs275.15.

The company posted net sales of Rs6.3 billion, down 3% year-on-year (YoY) in the third quarter of fiscal year 2015-2016 (3QFY16).

Despite 40% YoY fall in Arab Light Crude price (benchmark for local exploration and production (E&P) companies) during 3QFY16 quarter, sales remained better than expected.

“We attribute this to better production numbers which are sometimes higher than the provisional weekly numbers (due to data limitation), and possibly higher well-head gas prices for some fields,” the report added.

To recall, POL has signed a supplemental agreement with the government for revision of well-head gas prices. However, clarity in this regard is awaited, it said.

In 3QFY16, earnings surged by 7% YoY on the back of better than expected net sales, and lower effective tax rate, down 706 basis points YoY.

In 9MFY16, revenues declined by 24% YoY on the back of 48% YoY dip in Arab Light Crude price. The revenues were also affected due to a 3-week shutdown carried out at Makori gas field in August 2015, which was caused by a technical failure. As a result, earnings of the company went down by 21% YoY to Rs5.8 billion.

The expected production from fields like Mardankhel-1 and Tolanj are likely to support POL’s bottom-line in future. Moreover, the company provides an attractive dividend yield of 10-11%.

Published in The Express Tribune, April 14th,  2016.

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