Mari Energies braces for earnings hit on RLNG glut

July 07, 2025 (MLN): Mari Energies Ltd. (PSX: MARI) is staring at a steep earnings cut as Topline Securities slashed its FY25-27 profit forecasts by 31-42% on lower oil prices and a drop in production volumes due to surplus RLNG in Pakistan’s system.

The brokerage, however, raised its rating on the stock to Hold after a 28% correction since mid-December.

Topline now expects MARI to post earnings of Rs47.4/46.8/57.3 per share over FY25-27, down from earlier estimates, citing a 13% cut in oil price assumptions to US$65/bbl and weaker production.

Gas output is projected at 800, 798 and 860 MMCFD in FY25-FY27, with volumes only normalizing after the March 2026 renegotiation of Pakistan’s LNG purchase pact with Qatar.

Despite the earnings downgrade, the sharp underperformance versus the market, MARI shares have dropped 28% since December 16, versus a 12% rise in the benchmark index, prompting Topline to upgrade its stance from Sell.

It lifted its June 26 target price slightly to Rs618/share, incorporating new reserves from the Spinwam and Soho fields. This implies a muted upside of just 1.1%, including a 5.5% dividend yield.

The brokerage flagged Spinwam’s 0.8 TCF reserve estimate as encouraging, though it noted uncertainty over whether all four formations can start production concurrently.

Spinwam output is expected to begin in 4QFY27.

Topline cautioned that key risks include extended production curtailments, a further decline in global oil prices, and delays in bringing new fields online.

Source: Company Accounts, Topline Research

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