OGDC’s net income down by 15% YoY in FY20

September 28, 2020 (MLN): Oil and Gas Development Company Limited (OGDC) has observed 15.47% YoY decline in its net profits in FY20 to Rs 1 billion compared to the profits of Rs 1.18 billion earned in FY19.

The earnings per share of the company also nosedived by the same percent from Rs 27.53 to Rs 23.27

The net sales of the company in FY20 went down by 6% YoY from Rs 261.4 billion to Rs 245 billion mainly due to decline in International Crude Oil prices and the drop in the production of oil and gas amid lockdown. The major decline was seen in Tal block and Nashpa. This is however likely to normalize in the coming quarters as the effect of lockdown has largely subsided, a report by Intermarket Securities stated.

Accordingly, the gross margin has been squeezed to 61% in FY20 from 64% in FY19.

The other major factors that caused the company’s income to decline were higher exploration expenses and admin cost. Exploration expenses jumped by 45.72% YoY to Rs 18.2 billion, whereas, administration related cost grew by 23% YoY to Rs 5 billion.

Furthermore, finance cost also depicted an increase 78% YoY, on account of higher provision for decommissioning cost.

Adding to woes, the other income of the company declined by 32.6% YoY to Rs 21.8 billion in FY20 as compared to Rs 32.3 billion during corresponding period last year, owing to lower exchange gains.

Alongside financial results, the company also announced final cash dividend of Rs 2.50 per share i.e. 25% for the year 2019-20 This is in addition to Interim dividends already paid Rs. 4.25/- per share i.e. 42.5%.

 

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

 

Jun-20

Jun-19

% Change

Sales – net

                           244,856,754

                           261,481,188

-6.36%

Royalty

                           (27,626,096)

                           (29,335,927)

-5.83%

Operating expenses

                           (66,560,465)

                           (63,455,844)

4.89%

Transportation charges

                             (1,592,125)

                             (1,627,854)

-2.19%

 

                           (95,778,686)

                           (94,419,625)

1.44%

Gross profit

                           149,078,068

                           167,061,563

-10.76%

Other income

                             21,749,789

                             32,288,249

-32.64%

Exploration and prospecting expenditure

                           (18,213,438)

                           (12,499,324)

45.72%

General and administration expenses

                             (5,070,904)

                             (4,129,249)

22.80%

Finance cost

                             (3,011,454)

                             (1,692,538)

77.93%

Workers' profit participation fund

                             (7,529,732)

                             (9,294,706)

-18.99%

Share of profit in associate – net of taxation

                               6,062,575

                               4,865,418

24.61%

Profit before taxation

                           143,064,904

                           176,599,413

-18.99%

Taxation

                           (42,983,233)

                           (58,213,625)

-26.16%

Profit for the period

                           100,081,671

                           118,385,788

-15.46%

Basic and diluted earnings per share – Rupees)

                                        23.27

                                        27.53

-15.47%

                                                                                                                                                                                                                                           

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Posted on: 2020-09-28T17:00:00+05:00

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