With rise in Sui gas price, PPL profit more than doubles

Exploration company earns Rs34.69 billion in FY17

KARACHI: The consolidated profit of Pakistan Petroleum Limited (PPL) more than doubles to Rs34.69 billion in the year ended June 2017 primarily due to upward revision in the price of gas coming from Sui field and lower exploration cost, according to a bourse filing on Friday.

The oil and gas exploration and production company had registered a profit of Rs16.06 billion in the previous fiscal year.

Earnings per share swelled to Rs17.60 in FY17 compared to Rs8.15 in the preceding year. The board of directors recommended a final cash dividend of Rs6 per share.

“If approved by members at the forthcoming annual general meeting, the dividend will be distributed to members whose names appear in the register of members as at close of business on October 13, 2017,” the company said in a notification to the Pakistan Stock Exchange (PSX).

PPL’s stock price rose 1.94%, or Rs3.42, to Rs178.83 with a volume of 1.69 million shares at the PSX.

The company recorded net sales of Rs116 billion in FY17, up 46% year-on-year.

“The increase in sales is attributable to the retrospective impact of Sui’s revised wellhead gas price coupled with higher oil prices and hydrocarbon production,” Arif Habib Limited Head of Research Shahbaz Ashraf said in post-result comments.

Crude oil prices averaged $48.42 per barrel in FY17 compared to $40.77 per barrel in FY16.

Taurus Research said PPL managed to increase oil and gas production by 12% and 19% year-on-year, respectively, from Kandhkot and Sui fields.

Exploration expenses dropped notably by 27% to Rs11.75 billion in FY17 from Rs16.07 billion in the previous year.

Moreover, the effective tax rate on profit came down to 26% in FY17 against 35% in FY16, it added.

Elixir Research added “adjusting for gains from Sui’s wellhead gas price revision, the earnings were lower than our estimate due to greater-than-expected increase in royalty and operating expenses.”

Published in The Express Tribune, September 16^th, 2017.

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