Lower production and oil prices weakened OGDCL’s profits by 20.5% YoY

February 24, 2021 (MLN): Oil and Gas Development Company Limited (OGDCL) has reported 20.5% YoY decline in net profits to Rs 42.2 billion with Earnings per share (EPS) of Rs 9.82/sh during 1HFY21, against the profits of Rs 53 billion (EPS: Rs 12.35/sh) earned in the corresponding period last year.

In conjunction with results, the company also announced a cash dividend of Rs 1.6/sh i.e. 16% which is in addition to interim dividend already paid @2 per share i.e. 20%.

The decline in OGDCL’s profitability can be attributed to lower revenues amid lower oil and gas production, drop in oil prices and 11.6% YoY increase in operating expenses.

During the period net sales of the company went down by 13% YoY. Resultantly the gross margin of the company shrank to 58% from 64% in 1HFY20.

On the cost front, company’s operating expenses jumped by 11.6% YoY mainly owing to higher salary and depreciation cost. While its exploration cost witnessed a decline of 50% YoY can be due lower prospecting expense and dry well cost, which constrained some of the decline in company’s earnings.

The other income of the company plunged by 49.6% YoY compared to the same period last year on account of exchange loss and lower interest income on deposits amid low interest rates.

The effective tax rate of the company came in at 32.0% against 33% in the comparative period.

 

Profit and Loss Account for the Half year ended December 31, 2020 ('000 Rupees)

 

Dec-20

Dec-19

% Change

Sales – net

                           110,979,840

                           127,451,841

-12.92%

Royalty

                           (12,902,888)

                           (15,215,640)

-15.20%

Operating expenses

                           (33,301,819)

                           (29,839,245)

11.60%

Transportation charges

                                 (835,498)

                                 (812,515)

2.83%

 

                           (47,040,205)

                           (45,867,400)

2.56%

Gross profit

                             63,939,635

                             81,584,441

-21.63%

Finance and Other income

                               6,597,417

                             13,096,132

-49.62%

Exploration and prospecting expenditure

                             (5,222,391)

                           (10,425,171)

-49.91%

General and administration expenses

                             (2,113,009)

                             (2,819,495)

-25.06%

Finance cost

                             (1,146,019)

                             (1,499,901)

-23.59%

Workers' profit participation fund

                             (3,266,794)

                             (4,144,281)

-21.17%

Share of profit in associate – net of taxation

                               3,280,239

                               2,949,618

11.21%

Profit before taxation

                             62,069,078

                             78,741,343

-21.17%

Taxation

                           (19,843,709)

                           (25,630,021)

-22.58%

Profit for the period

                             42,225,369

                             53,111,322

-20.50%

Basic and diluted earnings per share – Rupees)

                                          9.82

                                        12.35

-20.49%

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Posted on: 2021-02-24T15:40:00+05:00

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