Pakistan Oilfield earnings up by 3 percent

Pakistan Oilfield Limited (POL) has announced its second quarter, ended 31st December 2016 (2QFY17) financial results It has posted profit after tax of Rs2.34 billion (EPS: Rs9.88), up 3%YoY/1%QoQ. The earnings came slightly higher than expectation primarily due to better topline resulting from improved hydrocarbon flows. This took 1HFY17 earnings to Rs4.66 billion (EPS: Rs19.68), up 27%YoY. POL also announced an interim dividend of Rs15/share. Result highlights include: 1) topline up by 9%YoY to Rs7.08 billion in 2QFY17 owing to 19%YoY increase in average oil price to US$48/bbl and relatively improved hydrocarbon flows, 2) gross profit grew by 18%YoY to Rs3.48 billion during the quarter owing to growth in topline together with 10%YoY decline in operating costs, 3) exploration costs jumped to Rs126 million due to higher exploration activity during the period, and 4) pre-tax earnings grew by 16%YoY to Rs3.15 billion. However, 76%YoY higher tax expense at Rs806 million due to higher effective tax rate of 26% as compared to 17% in 2QFY16 kept earnings growth in check at 3%YoY.