OGDC’s income plunged by 14% YoY owing to higher operating expenses

October 29, 2020 (MLN): The state-owned Oil and Gas Development Company Limited (OGDC) has unveiled its financial performance for the first quarter of FY21, as per which the company’s profitability nosedived by 14% YoY to Rs 23.4 billion from Rs 27.3 billion realized in 1QFY20.

This reflected in company’s earnings per share which also plummeted by the same percent from Rs 6.35 to Rs 5.45.

The decline in profitability can be attributed to lower realizable oil prices and higher operating expenses compared to same quarter last year.

Despite increase in oil and gas production, OGDC’s net sales went down by 10% YoY to Rs 59.5 billion mainly due to decline in crude oil prices.

Operating expenditures of the company remained on higher side, showing a jump of 16% YoY which was partially offset by lower exploration and prospecting.

As a result, the gross margins of the company shrank to 59% from 65% in the same quarter previous year.

The Exploration expenses of the company clocked in at Rs 2.9 billion, down by 25% YoY because of lower exploratory and development related activities as in 1QFY21, OGDC has planned 45 new wells, including 21 exploratory wells and 17 development wells for FY21 and so far the company has spudded 3 exploratory and 1 development well in 1QFY21, a report by Pearl Securities highlighted.

Furthermore, the Other income surged 16%YoY to Rs3.3 billion. This was due to low base effect as OGDC booked Rs1.7 billion exchange loss during the corresponding period last year.

On the tax front, the company booked effective tax rate at 31%.

In conjunction with the results, OGDC also announced cash dividend of Rs 2 per share for the quarter mentioned above.

Profit and Loss Account for the Quarter ended September 30th, 2020 ('000 Rupees)

 

Sep-20

Sep-19

% Change

Sales – net

                             59,528,070

                             66,203,989

-10.08%

Royalty

                             (6,726,750)

                             (7,738,740)

-13.08%

Operating expenses

                           (17,274,321)

                           (14,885,516)

16.05%

Transportation charges

                                 (228,999)

                                 (388,928)

-41.12%

 

                           (24,230,070)

                           (23,013,184)

5.29%

Gross profit

                             35,298,000

                             43,190,805

-18.27%

Other income

                               3,294,396

                               2,844,568

15.81%

Exploration and prospecting expenditure

                             (2,956,774)

                             (3,961,861)

-25.37%

General and administration expenses

                             (1,073,562)

                             (1,043,878)

2.84%

Finance cost

                                 (564,323)

                                 (744,999)

-24.25%

Workers' profit participation fund

                             (1,790,549)

                             (2,088,861)

-14.28%

Share of profit in associate – net of taxation

                               1,813,241

                               1,492,591

21.48%

Profit before taxation

                             34,020,429

                             39,688,365

-14.28%

Taxation

                           (10,593,046)

                           (12,372,015)

-14.38%

Profit for the period

                             23,427,383

                             27,316,350

-14.24%

Basic and diluted earnings per share – Rupees)

                                          5.45

                                          6.35

-14.17%

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Posted on: 2020-10-29T12:01:00+05:00

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