Corporate Results: Pakistan Petroleum makes Rs20b in six months

Country’s second largest oil, gas explorer witnessed an upsurge of 21% in net sales to Rs45.3 billion.

KARACHI: Pakistan Petroleum Limited’s net profit jumped 21% to Rs20.1 billion on the back of higher sales during July to December 2011. The result, in line with market expectations, is also accompanied with an interim cash dividend of Rs5 per share, according to a notice sent to the Karachi Stock Exchange on Wednesday.

The phenomenal growth in earnings primarily stems from a significant uptick in sales coupled with support from other operating income, said Topline Securities analyst Nauman Khan. The country’s second largest oil and gas explorer witnessed an upsurge of 21% in net sales to Rs45.3 billion on account of favourable price in the first half of 2012.

On the pricing front, higher Arab light crude price against the relevant period last year translated into improved hydrocarbon prices while volumes improved on the back of enhanced production from Kohatbased fields Tal and Naspha blocks in oil and Kandkhot for gas, added Khan.

Moreover, the company’s other income grew by impressive 84% to stand at Rs3.5 billion against Rs1.9 billion in the same period last year due to growing cash balances. This helped the company book higher interest income on bank placements, treasury bills along with gains from forex deposits.

Field expenditures depicted a 22% jump mainly on the back of dry well expenses attributed to the suspended wells during the quarter and heightened seismic activity in Sui during the period under review.

Arab light price increase by 4.5% in the six months coupled with 1.5% depreciation in the rupee against the dollar will translate into higher wellhead gas prices for the uncapped fields of Pakistan Petroleum in the second half of the fiscal year 2012. Uncapped fields contribute 70% to PPL’s total gas production.