OGDC’s earnings drop 12% on higher exploration cost

Company declares Rs1 per share as interim cash dividend

KARACHI: Oil and Gas Development Company (OGDC) posted a net profit of Rs30 billion for the six months ended December 31, 2016, down 12% from the same period of previous year on the back of lower sales value and almost double exploration cost, said a bourse filing on Friday.

In Jul-Dec 2015, OGDC’s earnings were Rs34.20 billion.

Earnings per share fell to Rs6.98 in the half year of FY17 from Rs7.95 in the same half of previous year.

OGDC board of directors recommended an interim cash dividend of Rs1 per share. The entitlement will be paid to the shareholders whose names appear in the register of members on March 14, 2017. The pay-out is in addition to the interim dividend already paid at the rate of Rs1.50 per share.

The company’s share price dropped 1.23%, or Rs1.96, to Rs156.55 with a volume of 581,500 shares at the Pakistan Stock Exchange.

Elixir Securities Deputy Head of Research Mubashir Anis Silat, in a post-result report, said the variation in net earnings emanated from increased operating expenditure and higher-than-estimated exploration and prospecting costs, which were offset by a lower effective tax rate of 22%.

Operating expenses rose 7% to Rs28.35 billion in Jul-Dec 2016 compared with Rs26.56 billion in the corresponding period of previous year.

Exploration and prospecting expenditure doubled to Rs8.18 billion from Rs4.71 billion.

The company paid Rs10.49 billion in tax on profit, which was 24% lower than Rs13.87 billion in the corresponding period of previous year.

Net sales, in rupee terms, fell 6% to Rs81.08 billion in Jul-Dec 2016 against Rs86.18 billion in the same half last year.

Other income improved to Rs9.30 billion from Rs8.29 billion. Finance cost dropped to Rs815.24 million from Rs832.65 million.

Published in The Express Tribune, February 18^th, 2017.

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