OGDC’s earnings run out of steam, down 36%

February 28, 2025 (MLN): Oil & Gas Development Company Limited (PSX: OGDC) reported a 36.01% decline in its profit after tax for the half-year ended December 31, 2024, primarily due to a drop in sales and higher taxation.

The company has declared an interim cash dividend of Rs4.05 per share (40.5%) for the quarter ended December 31, 2024, in addition to the interim dividend of Rs3 per share (30%) already paid.

The company posted a profit after tax of Rs82.56bn [EPS: Rs19.17] in H1 FY25, down from Rs129.02bn [EPS: Rs28.67] in the same period last year (SPLY).

OGDC's net sales declined by 12.3% to Rs206.42bn, compared to Rs235.37bn in SPLY.

The decline in revenue was accompanied by a 17.17% drop in operating expenses to Rs53.92bn, while royalty payments also fell 9.72% to Rs24.78bn.

The company’s gross profit stood at Rs127.42bn, marking a 12.84% decline from the previous year's Rs146.20bn.

Despite the fall in gross earnings, finance and other income surged by 71.85% to Rs46.86bn, which partially offset the negative impact of lower sales.

On the expense side, exploration and prospecting expenditure jumped 33.2% to Rs7.79bn, while general and administration expenses increased by 4.64% to Rs3.8bn.

However, the company benefited from a 30.57% decline in finance costs, which stood at Rs3bn.

OGDC’s profit before taxation rose 12.66% to Rs155.82bn.

However, the company faced a significant increase of 106.9% in taxation, which surged to Rs73.26bn, further impacting the bottom line.

As a result, OGDC recorded a 33.14% drop in earnings per share (EPS) to Rs19.17, compared to Rs28.67 in SPLY.

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