POL stock today hit lower lock at -5.00% after it missed the expected targets by miles in the financial releases. Street was extremely bullish on quarterly and half year POL results expecting the quarter to report a 98% jump in earnings.
Pakistan Oilfields Ltd. (POL) today announced financial results for the quarter and half year ended December, 2017. POL missed all the expectations as the company reported a mere increase of 0.84% in sales during HY 2017 from same period last year.
Street expectations for the POL HY Profit average around Rs. 6.5 billion, the company managed to post only a marginal growth of 2.2% to Rs. 4.761 billion for the half year.
Against the expected EPS of 23.05 per share, POL for the half year ended December, 2017 POL posted and EPS of 20.13 per share.
According to analysts and research houses, the expected increase to earnings was attributed to higher net revenue amid 6% – 7% growth in oil and gas production, increasing average realized oil prices by 24.1% year on year, PKR depreciation of 1.1% year on year on average and one-off impact of PKR 2.9bn on account of re-pricing of TAL block field.
The company in the official release also informed the bourse of the Accounting rules that reversed sums worth Rs. 786 million for the accounting period falling between July 1, 2017 and December 31, 2017. The adjustments were made due to the conversion of TAL Block Agreements from Petroleum Policy 1997 to Petroleum Policy 2012 for future and retrospective pricing. The company will challenge the imposition of WLO in the Court of Law.
The company further informed that the “entire revenue account of enhanced gas price incentive of Rs. 6,404 million till December 31, 2017 related to conversion of TAL Block from Petroleum Policy 1997 to Petroleum Policy 2012 will be accounted for upon resolution of this matter as per the accounting policy of the company.”
Board at the POL agreed to declare an interim cash dividend for the half year ended December, 31st 2017 at Rs. 17.5 per share i.e. 175%.
Unconsolidated Profit and Loss Account – For the Half Year Ended, December 31st 2017 | |||
|---|---|---|---|
Key Financials | 2017 | 2016 | % Change |
Amounts in PKR ‘000 | |||
Sales | 14,162,075 | 14,043,710 | 0.84% |
Sales Tax | 921,723 | 1,238,809 | -25.60% |
Net Sales | 13,240,352 | 12,804,901 | 3.40% |
Operating Costs | 4,128,838 | 4,117,217 | 0.28% |
Excise Duty | 146,925 | 129,970 | 13.05% |
Royalty | 1,090,560 | 1,073,697 | 1.57% |
Amortization of development and decommissioning costs | 1,490,237 | 1,425,839 | 4.52% |
Gross profit | 6,383,792 | 6,058,178 | 5.37% |
Exploration costs | 740,408 | 190,331 | 289.01% |
Administration expenses | 89,935 | 70,940 | 26.78% |
Finance costs | 675,442 | 389,778 | 73.29% |
Other charges | 392,494 | 383,358 | 2.38% |
Other income | 1,564,962 | 947,836 | 65.11% |
Profit before taxation | 6,050,475 | 5,971,607 | 1.32% |
Provision for taxation | 1,289,122 | 1,315,889 | -2.03% |
Profit for the period | 4,761,353 | 4,655,718 | 2.27% |
EPS – Basic and diluted | 20.13 | 19.68 | 2.29% |
Company release on Earnings Report can be accessed here.
