POL: Lower revenues and higher effective tax rate limited earnings growth
MG News | January 27, 2021 at 11:48 AM GMT+05:00
January 27, 2021 (MLN): Pakistan Oilfields Limited (POL) announced its financial results for 1HFY21, with earnings clocking in at Rs 6.7 billion (EPS: Rs 23.76) as compared to Rs 8.73 billion (EPS: Rs 30.73) in the same period last year, down by 22.7% YoY.
Alongside financial results, the company also announced a cash dividend of Rs 20 per share i.e. 200%.
The decline in the company’s profits during the period is largely attributable to a drop in average oil prices, a drop in oil & gas production, and a higher effective tax rate of 33% compared to 27% in 1HFY20.
The revenues of the company also went down by 17.38% YoY on the back of lower oil prices and hydrocarbon production.
Operating expenditures during the period under review clocked in at Rs 4.46 billion, 3.4% lower than the same period of last year.
However, Exploration costs witnessed a significant decline of 86% YoY due to limited exploratory and prospecting expenditures.
Furthermore, the company recorded a finance income of Rs 102.4 million compared to Rs 447.89 million finance cost in1HFY21, which is attributable to exchange gain on foreign currency liabilities amid appreciation of exchange rate during the period.
| Consolidated Financial Results for the half-year ended December 31, 2020 ('000 Rupees) | |||
|---|---|---|---|
|
| Dec-20 | Dec-19 | % Change |
| Sales | 19,849,079 | 24,024,925 | -17.38% |
| Sales tax | (1,743,543) | (1,843,233) | -5.41% |
| Excise duty | (141,924) | (146,052) | -2.83% |
| Net Sales | 17,963,612 | 21,168,445 | -15.14% |
| Operating costs | (4,463,525) | (4,621,122) | -3.41% |
| Royalty | (1,931,940) | (2,339,408) | -17.42% |
| Amortization of development and decommissioning costs | (1,241,240) | (1,245,828) | -0.37% |
|
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|
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| Gross Profit | 10,326,907 | 12,962,087 | -20.33% |
| Exploration cost | (109,231) | (790,648) | -86.18% |
| Administrative expenses | (129,561) | (115,337) | 12.33% |
| Finance cost | 102,427 | (447,891) | -122.87% |
| Other charges | (747,579) | (812,721) | -8.02% |
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| Other income | 517,468 | 1,110,112 | -53.39% |
| Share in (loss)/profits of associated companies - net of impairment loss | 153,601 | 107,042 | 43.50% |
| Impairment/ reversal impairment on Investment in associated company | - | - | - |
| Profit before taxation | 10,114,032 | 12,012,644 | -15.81% |
| Provision for taxation | (3,365,954) | (3,281,103) | 2.59% |
| Profit after taxation | 6,748,078 | 8,731,541 | -22.72% |
| Earnings per share - basic and diluted (Rupees) | 23.76 | 30.73 | -22.68% |
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