PPL profit declines 20% in 1HFY26

February 13, 2026 (MLN): Pakistan Petroleum Limited (PSX:PPL) reported a net profit of Rs40.18bn for the half year ended December 31, 2025, a 19.6% decline from the Rs49.95bn profit recorded in the same period last year.

The company's earnings per share decreased to Rs14.77 from Rs18.36 in the corresponding period of the previous year, while dividend was declared at Rs. 2.00 per share (20%) on Ordinary Shares and Rs. 1.00 per share (10%) on Convertible Preference Shares

The oil and gas exploration company's revenue from contracts with customers declined 7% YoY to Rs119.13bn from Rs128.08bn.

Operating expenses increased 10.7% to Rs30.60bn from Rs27.63bn, while royalties and other levies decreased 9.8% to Rs17.96bn from Rs19.92bn.

Gross profit declined 12.4% to Rs70.57bn from Rs80.53bn in the prior period.

The gross profit margin stood at 59.2% compared to 62.9% in H1 FY2025, indicating margin compression.

The net profit margin declined to 33.7% from 39% in the same period last year, which reflects the impact of lower revenue and reduced other income on overall profitability.

Exploration expenses dropped sharply by 74.1% to Rs2.05bn from Rs7.91bn, providing significant relief compared to the prior period's elevated exploration spending.

Administrative expenses increased 16.9% to Rs3.88bn from Rs3.32bn, while finance costs declined 18.3% to Rs1.01bn from Rs1.24bn, reflecting improved financial management.

The company's share of loss from associates stood at Rs565.8m compared to a loss of Rs1.44bn in H1 FY2025, showing improvement in associate performance.

Other charges decreased 13.6% to Rs5.98bn from Rs6.92bn, while other income dropped significantly by 61.9% to Rs5.78bn from Rs15.18bn.

The substantial decline in other income emerged as a key factor affecting profitability, partially offsetting the benefits of lower exploration expenses.

Profit before taxation reached Rs62.86bn, down 16% from Rs74.88bn in the prior period.

The company recorded a taxation expense of Rs22.68bn, down 9% from Rs24.92bn in the corresponding period last year, providing some mitigation to the bottom-line impact.

The decline in profitability was primarily driven by lower revenue, compressed margins, and a substantial drop in other income, though these were partially offset by significantly reduced exploration expenses and lower share of losses from associates.

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