Earning Review: POL realizes 9% increase in profitability

MG News | October 15, 2019 at 05:12 PM GMT+05:00

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October 15, 2019 (MLN): Pakistan Oilfields Limited (POL) has realized around 9% increase in its net profits to Rs 3.9 billion for the quarter ended September 2019 against Rs 3.5 billion earned in same period last year. The earning per share of the company locked in at Rs 13.68.

The earnings are in line with the market expectations as 3 out of 5 of the brokerage houses projected an increase in POL’s profitability.

The upsurge in net earnings of the company mainly came on the back of decline in operating costs and amortization cost by 18.7% and 33.6% respectively. Moreover, noteworthy currency depreciation against USD and lower explorations expenses owing to no dry well cost incurred, lessened the impact of lower production during the quarter.

The company witnessed a scanty decline of 3%YoY in its net sales, as notable currency depreciation alleviated the impact of lesser activity during the period.

Moreover, POL also observed a considerable decline in finance cost by around 65% due to absence of exchange losses.

Profit and Loss Account for the quarter ended September 30th 2019 ('000 Rupees)
	Sep-19	Sep-18	% Change
Sales	11,298,634	11,792,857	-4.19%
Sales tax	(863,796)	(993,027)	-13.01%
Net Sales	10,434,838	10,799,830	-3.38%
Operating costs	(2,431,930)	(2,992,862)	-18.74%
Excise duty and development surcharge	(73,590)	(77,669)	-5.25%
Royalty	(1,118,059)	(1,084,385)	3.11%
Amortization of development and decommissioning costs	(513,456)	(773,721)	-33.64%

Gross Profit	6,297,803	5,871,193	7.27%
Exploration cost	(375,831)	(731,265)	-48.61%
Administrative expenses	(60,407)	(62,388)	-3.18%
Finance cost	(138,743)	(401,744)	-65.46%
Other charges	(400,582)	(372,547)	7.53%

Other income	399,495	694,768	-42.50%
Share in (loss)/profits of associated companies - net of impairment loss	(82,631)	(156,896)	-47.33%
Profit before taxation	5,639,104	4,841,121	16.48%
Provision for taxation	(1,755,531)	(1,269,974)	38.23%
Profit after taxation	3,883,573	3,571,147	8.75%
Earnings per share - basic and diluted (Rupees)	13.68	12.57	8.83%

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