Pakistan’s largest
exploration and production (E&P) company, Oil & Gas Development Company
Limited (OGDC) has announced its half yearly (1HFY17) financial results. The
Board of Directors also approved payment of one Rupee per share interim
dividend. Both the financial results and dividend payout are below
expectations.
OGDC has posted net profit of R15.38 billion (EPS: Rs3.58), down
4%YoY while up 5%QoQ. The earnings are lower than with major deviation coming
from lower topline, higher operating expenses and exploration costs partially
compensated by lower effective tax rate. While the 1HFY17 earnings are down
12%YoY to Rs30.01 billion (EPS: Rs6.98) owing to lower realized gas prices
(result of lagged oil price linkage). The earnings are expected to increase
onwards due to improvement in realized gas prices and significant addition in
flows from KPD-TAY, Sinjhoro and TAL Block.
The major takeaways are: 1) Topline
remained flat on quarterly basis at Rs41.52 billion, however, it improved by
5%QoQ owing to improved oil production and higher oil price, 2) operating expenses
increased to Rs15.28 billion in 2QFY17, 3) exploration expense increased 33%YoY
due to relative differential in dry wells’ expenses, 4) though other income was
relatively flat at Rs4.25 billion and 5) tax expenses declined by 27% to Rs4.29
billion due to lower effective tax rate.
OGDC:
Income Statement
|
||||||
(Rs million)
|
2QFY17
|
2QFY16
|
YoY
|
1HFY17
|
1HFY16
|
YoY
|
Net
Sales
|
41,516
|
41,673
|
0.0%
|
81,081
|
86,186
|
-6.0%
|
Royalty
|
-4,521
|
-4,680
|
-3.0%
|
-8,828
|
-9,694
|
-9.0%
|
Operating
expenses
|
-15,277
|
-13,934
|
10.0%
|
-28,356
|
-26,568
|
7.0%
|
Transportation
charges
|
-426
|
-401
|
6.0%
|
-836
|
-869
|
-4.0%
|
Gross
profit
|
21,291
|
22,659
|
-6.0%
|
43,061
|
49,055
|
-12.0%
|
Other
Income
|
4,248
|
4,305
|
-1.0%
|
9,309
|
8,295
|
12.0%
|
Share
of profit
|
369
|
246
|
50.0%
|
922
|
615
|
50.0%
|
Exploration
expense
|
-3,868
|
-2,906
|
33.0%
|
-8,189
|
-4,713
|
74.0%
|
Admin
expense
|
-925
|
-897
|
3.0%
|
-1,653
|
-1,812
|
-9.0%
|
Finance
cost
|
-412
|
-408
|
1.0%
|
-815
|
-833
|
-2.0%
|
WPPF
|
-1,035
|
-1,150
|
-10.0%
|
-2,132
|
-2530.32
|
-16.0%
|
PBT
|
19,668
|
21,848
|
-10.0%
|
40,503
|
48,076
|
-16.0%
|
Tax
|
-4,291
|
-5,902
|
-27.0%
|
-10,494
|
-13,870
|
-24.0%
|
NPAT
|
15,377
|
15,946
|
-4.0%
|
30,008
|
34,206
|
-12.0%
|
EPS
|
3.58
|
3.71
|
-4.0%
|
6.98
|
7.95
|
-12.0%
|
DPS
|
1.0
|
1.2
|
-17.0%
|
2.5
|
2.7
|
-7.0%
|
ETR
|
-22.0%
|
-27.0%
|
-
|
-26.0%
|
-29.0%
|
-
|
