OGDC profits surge 38% on higher prices

Lower-than-expected tax rate bodes well for the Oil and Gas Development Company’s company.

KARACHI: Oil and Gas Development Company’s profit increased 38.5 per cent in July-September on the back of higher oil and gas prices along with large revenues booked from Bobi field.

The company’s net profit increased to Rs16.7 billion in the first quarter of fiscal 2011 against Rs12.1 billion posted in the same period last year, according to a notice sent to the Karachi Stock Exchange (KSE) on Tuesday.

Lower-than-expected tax rate of 31 per cent also bade well for the company, said IGI Securities analyst Umair Siddique.

The net profit was higher than expected as research firms estimated the profit to stand in the vicinity of Rs15 billion.

Hike in oil and gas prices defied the fall in production levels to support the company’s revenues, added Siddique.

Average Arab light oil price during the period stood at $73.5 per barrel against an average of $69.3 per barrel recorded in the corresponding period last year.

The company also announced a cash dividend of Rs1.5 per share.

Revenue increased 24 per cent to Rs39.5 billion during the quarter ended September 30 against Rs31.8 billion in the same period last year.

The company booked revenues of around Rs2.7 billion from the Bobi field, excluding the impact of this field, the earnings would have been only 12 per cent on a yearly basis.

OGDC’s stock price fell 0.07 per cent to close at Rs152.55 during the trading session at the KSE on Tuesday.

Total trade debts stand at Rs95.7 billion including Rs64.7 billion overdue from gas distribution companies and refineries.

Other income dropped 24 per cent to Rs606.8 million against Rs798.7 million as the company witnessed lower income on deposits.

Published in The Express Tribune, October 27^th, 2010.