Corporate results: Pakistan Petroleum bags Rs33.5b in nine months

Robust sales, increased production, expansion strategy help explorer grow.

KARACHI:

Pakistan Petroleum (PPL) reported its performance for the first nine months of fiscal 2013 to the Karachi Stock Exchange (KSE) on Tuesday, where it bagged Rs33.53 billion during the period against Rs32.27 billion in the comparable period of the preceding fiscal year.

Increased production of oil and gas coupled with lower operating expenses amplified the explorer’s bottom-line by 4%, according to a copy of the results sent to the KSE.

In his interim review of the results, PPL Chairman Mohsin Aziz said that “profitability during the current nine months ending March 31, 2013 improved due to increase in oil sales volume, impact of higher international oil prices and depreciation of the rupee against the US dollar.”

Resultantly in the nine-month period, PPL’s revenues clocked in 8% higher at Rs77.177 billion compared to Rs71.511 billion in the corresponding period of last fiscal.

Volumetric gas sales were down 9.8% to 226,181 million cubic feet, oil sales were up 14% at 2.54 million barrels, whereas liquefied petroleum gas sales shrunk 20% to 12,745 tons. Despite the drop in gas sales, favourable wellhead prices helped boost the top-line. Moreover, higher oil prices coupled with increased production and 8% rupee depreciation also supported the growth in revenues.

On the contrary, considerable increase in field expenses to Rs24.1 billion on account of higher exploration activity severely dampened performance, said Muhammad Ismail, analyst at BMA Capital.

During the period, PPL’s investment activities fared very well, as its other income grew by Rs358 million as a result of comparatively higher investments. However, the income was partially offset by lower interest rates. Furthermore, Byco Petroleum paid back its debts of Rs25 million to PPL, which was adjusted in other income, providing a much-needed boost to the company’s bottom-line.

Finance costs of the explorer rose even in the lower-interest environment, as the company seeks to expand locally and abroad through mergers and acquisitions.

During the January-March quarter, PPL set up a subsidiary in Dubai, United Arab Emirates with the name of PPL Asia DMCC to develop infrastructure in its Iraq field. Secondly, the company acquired MND Exploration and Production with holding interests in five fields in Pakistan and one in Yemen and renamed it PPL Europe E&P.

From the date of acquisition, PPL Europe E&P contributed Rs62 million and Rs22 million to PPL’s revenue and profits respectively.

Published in The Express Tribune, May 1^st, 2013.

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