Pakistan Petroleum Limited (PPL) has a huge investment stuck in Yemen due to poor law and order situation in the country. PHOTO: FILE
The oil and gas exploration and production company had earned Rs12.06 billion in the same half last year.
Earnings per share fell to Rs5.58 in Jul-Dec 2016 from Rs6.12 in the corresponding period of previous year.
The board of directors has approved an interim cash dividend of Rs3 per share, which will be distributed to members whose names appear in the register of members on May 12, 2017.
Brokerage houses, including Topline Securities and Taurus Securities, termed the financial results above market expectations.
The company’s share price increased 1.25% or Rs1.97 and closed at Rs159.23 with a volume of 809,300 shares at the Pakistan Stock Exchange.
PPL paid 29% tax on profit before tax against 21% in the corresponding half of last year.
In other words, it paid Rs4.57 billion in taxes on pre-tax profit, which was 41% higher than the Rs3.23 billion paid in the corresponding period of 2015. At the same time, the profit before tax improved 2% to Rs15.58 billion from Rs15.29 billion.
Other income dropped 25% to Rs2.26 billion from Rs3.04 billion.
On the flip side, other operating expenses plunged fourfold to Rs686.03 million from Rs3.43 billion.
Net sales decreased 3% to Rs40.25 billion from Rs41.66 billion, while finance cost slipped to Rs235.59 million from Rs333.22 million.
In the three months ended December 31, 2016, net profit declined 11% to Rs5.60 billion (EPS Rs2.84) from Rs6.31 billion (EPS Rs3.20) in the corresponding period of 2015. Net sales increased 2% to Rs21.32 billion in the quarter.
Topline Securities analyst Nabeel Khursheed said in post-result comments that “field expenses in 2QFY17 did not elevate as much as we earlier anticipated. Resultantly, earnings fared better than expectations.”
In the quarter, revenue (net sales) grew 2% due to a 19% increase in Arab Light Crude price, which is a benchmark for Pakistan exploration industry.
Oil production swelled by around 12% year-on-year on the back of additional flows from Nashpa, Adhi and Mardankhel fields, which cumulatively added around 15% to PPL’s 2QFY17 oil volumes, he said.
Despite a 1.6% increase in gas volume, gas revenue remained suppressed owing to lagged re-pricing impact (gas prices were linked to 1H2016 oil prices in which Arab Light Crude fell 35% YoY), he added.
Published in The Express Tribune, March 22nd, 2017.
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