POL earnings rise 12.6% to Rs4.9 billion in 2QFY20

Board declares interim cash dividend of Rs20 per share for half year

KARACHI: Pakistan Oilfields reported 12.6% growth in profit to Rs4.88 billion in the second quarter (Oct-Dec 2019) of the ongoing fiscal year primarily due to a drop in finance cost.

The company had announced earnings of Rs4.33 billion in the same period of previous year, according to a notice sent to the Pakistan Stock Exchange (PSX) on Tuesday. Earnings per share of the company increased to Rs17.15 in Oct-Dec 2019 from Rs15.26 in the corresponding period of previous year. The board of directors announced an interim cash dividend of Rs20 per share for the half year ended December 2019.

Net sales of the company slipped around 1% to Rs11.75 billion in the three months ended Dec 31, 2019 compared to Rs11.89 billion in the same period of previous year.

The decline came on the back of a drop in oil and gas production and decrease in realised oil prices.

Operating costs edged up 3% to Rs3.06 billion while exploration costs jumped a colossal 425.8% to Rs414.8 million in the period under review.

“The exploration cost surged five times year-on-year in 2QFY20 amid acquisition of seismic data from two blocks during the quarter. The total exploration cost in 1HFY20 settled at Rs791 million, down 2% year-on-year amid absence of dry wells compared to a dry well (Mamikhel Deep-1) in 1HFY19,” AHL Research said.

The increase was offset by a plunge in finance cost that fell 77% during the quarter under review to Rs309.1 million compared to Rs1.35 billion in the previous year.

The decline came as the exchange losses recorded previously related to decommissioning were normalised.

On the other hand, other income of the company fell 65.97% to Rs709.9 million in the period under review from Rs2.09 billion in the previous year. The decline was recorded amid absence of exchange gains.

A Topline Securities’ analyst, in post-result comments, stated: “We flag inability to receive a higher gas price incentive on Tal block owing to a dispute (pending in court), volatility in oil prices and dry wells as key risks for the company.”

POL share price increased Rs2.78 or 0.61% to Rs457.79 with a turnover of 272,500 shares at the PSX.

The company profit went up 10.47% to Rs8.73 billion in six months ended December 31, 2019 from Rs7.9 billion in the same period of previous year.

Meanwhile, earnings per share came in at Rs30.73 in the six-month period compared to Rs27.83 in the previous year.

Published in The Express Tribune, January 22^nd, 2020.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.