OGDC H1 profit slides 11.5%, declares Rs4.25 interim dividend

February 23, 2026 (MLN): Oil & Gas Development Company Limited (PSX: OGDC) reported a net profit of Rs73.02 billion for the half year ended December 31, 2025, down 11.5% from Rs82.46bn in the same period last year.

Earnings per share declined to Rs16.98 from Rs19.17 in H1 FY2025.

The company’s net sales decreased 6.6% YoY to Rs192.83bn from Rs206.42bn, showing lower overall revenue generation.

Cost of sales, including royalty and operating expenses, resulted in a gross profit of Rs103.46bn, down 18.8% YoY from Rs127.41bn in the prior period.

Gross profit margins contracted to 53.6% from 61.7%, indicating margin pressure amid declining revenues and sustained costs.

Operating expenses rose 24% YoY to Rs65.74bn, while transportation charges slightly declined 6% to Rs1.08bn. Exploration and prospecting expenditure surged 51% to Rs11.90bn, contributing to higher cost absorption. General and administrative expenses increased 19.6% YoY to Rs4.54bn.

Other income, comprising finance and miscellaneous gains, fell sharply 42% to Rs26.94bn from Rs46.58bn last year, dampening overall profitability.

Finance costs eased 17.6% to Rs2.42bn, providing modest relief. Workers’ profit participation fund expense declined 28.9% to Rs5.84 billion.

The company’s share of profit in associates rose 11.1% to Rs5.17bn, partially offsetting the decline in core operations.

Profit before income tax dropped 28.9% to Rs110.86bn from Rs155.82bn, while taxation declined 48.4% to Rs37.84bn.

The lower tax charge helped cushion the impact of weaker operational performance, resulting in a net profit decline of 11.5%.

OGDC declared an interim cash dividend of Rs4.25 per share (42.5%) for Q2 FY2026, in addition to the previously paid interim dividend of Rs3.50 per share (35%).

Despite the YoY decline in profits, OGDC’s operational resilience and continued dividend payouts highlight strong cash generation and shareholder value.

OGDC’s receivables collection witnessed a sharp rebound in 2QFY26, jumping to 157% as trade receivables declined by approximately Rs29bn QoQ.

The improvement underscores the company’s enhanced cash recovery efficiency, with estimated recovery ratios for 1HFY26 standing at 129%, up significantly from 71%, 87%, and 105% recorded in FY23, FY24, and FY25, respectively.

This trend shows OGDC’s strengthened focus on collections and effective management of outstanding dues, helping maintain robust liquidity despite fluctuating gas revenues.

The sustained recovery momentum in 2QFY26 positions the company favorably for operational stability in the ongoing fiscal year.

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