POL earnings hit by rising exploration costs, drop 74% in Q3

October 18, 2024 (MLN): Pakistan Oilfields Limited (PSX: POL)'s earnings for the third quarter plummeted by 73.54% with the profit after tax clocking in at Rs2.57 billion [EPS: Rs9.05] compared to the bottom line of Rs9.71bn [EPS: Rs34.2] in the same period last year (SPLY).

An overview of the profit and loss account shows that initial troubles began with a decline in revenue, but the main issue became apparent with exploration expenses surging by 976%.

The company's top line shrank 7.4% to Rs15.45bn as compared to Rs16.68bn in SPLY.

On the other hand, the cost of sales rose by 13.6% which along with a lower revenue worsened the gross profit by 15.7% to Rs10.08bn in Q3 CY24.

The gross margins worsened to 65.2% as compared to 71.7% in SPLY.

POL faced an additional setback as its income declined by 23.4%, standing at Rs3.75bn in Q3 CY24, compared to Rs4.89bn in the same quarter last year.

The company's expenses regarding administration expenses and other operating charges fell 2.1% and 63% YoY, respectively.

However, exploration costs surged to Rs7.74 billion compared to Rs719.9 million in the same quarter last year, significantly impacting and shrinking the bottom line.

The company’s finance cost deflated by 26.2% and stood at Rs939.33m as compared to Rs1.27bn in SPLY.

On the tax front, the company paid a lower tax worth Rs2.13bn against the Rs4.12bn paid in the corresponding period of last year, depicting a decrease of 48.3%.

Amount in thousand except for EPS

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