Strong sales propel PPL’s profit to Rs9.22b in Oct-Dec quarter

Net sales grow due to higher Arab Light oil prices and upward revision in Sui field’s gas price

KARACHI: Pakistan Petroleum Limited’s (PPL) consolidated profit grew 64.5% to Rs9.22 billion in the quarter ended December 31, 2017 primarily due to robust sales and high other income, according to a notice sent to the Pakistan Stock Exchange (PSX) on Tuesday.

In the corresponding three months (Oct-Dec) of previous year, the oil and gas exploration and production company had recorded a profit of Rs5.60 billion.

Earnings per share came in at Rs4.68 in the Oct-Dec 2017 quarter compared with Rs2.84 in the same quarter in 2016.

The board of directors approved interim cash dividend of Rs4 per ordinary share and Rs3 per convertible preference share. The entitlement will be distributed to the members whose names will appear in the company’s register at the close of business on April 10, 2018.

PPL’s share price increased 1.22%, or Rs2.40, to close at Rs199.05 with 385,300 shares changing hands at the PSX.

Net sales of the company surged 35% to Rs28.86 billion from Rs21.33 billion.

Topline Securities’ analyst Nabeel Khursheed, in post-result comments, said PPL’s net sales grew as a result of higher Arab Light oil prices, up 25%, and due to upward revision in Sui field’s wellhead gas price.

Moreover, unlike Pakistan Oilfields (POL), PPL did not reverse the Rs4.6-billion entry that it made in the first quarter of current financial year on account of retrospective impact of Tal block pricing.

“The company has challenged an SRO (for the collection of windfall levy on oil) in the Islamabad High Court (IHC) as per its notice of Feb 22, 2018, stating that existing petroleum concession agreements cannot be unilaterally revised by the government, thereby status quo should be maintained on Tal block pricing. Next hearing of the case is on March 15,” he said.

Other income swelled threefold to Rs3.33 billion from Rs1.13 billion.

“We believe that one of the factors that led to this was exchange gains on foreign currency on the back of rupee’s devaluation against the US dollar during the quarter. PPL had foreign currency deposits of around $250 million as of September 2017,” the analyst added.

Royalties were up 61% year-on-year in the quarter, which was attributable to the royalties paid to Balochistan government as part of the agreement for Sui field’s price revision.

Published in The Express Tribune, February 28^th, 2018.

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