February 25, 2020 (MLN): The Pakistan Petroleum Limited (PPL)’s net profits for the six months stumbled by 19% YoY to Rs 24.44 billion with EPS Rs 8.98 per share as compared to Rs 30.267 billion earned ion the corresponding period of last year.
The decline in the company’s profitability was mainly attributable to a fall in oil and gas production and lower oil prices.
During the period, the total gas production for the Company cut down by 10%YoY on the back of nearly lower production from Kandhkot and Tal Block. In addition, Oil production also fell by 5%YoY owing to lower production from Nashpa, Adhi and Tal block, however, the addition of Dhok Sultan in November 2019 partially offset the decline in oil production.
The revenues of the company surged by 8.32% YoY to Rs 85.6 billion. This positive price variance was mainly owing to devaluation of Pak Rupee against Green Back which was partially offset by lower Oil prices and decline in production flows during the period mentioned above.
On the other hand, the exploration expenses of the company remained elevated as it increased more than double by 74% YoY due to dry well cost incurred at Nooh Well (Hab Block). The financial charges of the company also grew by a considerable amount of Rs 260 million owing to higher interest rates on short-term borrowings.
More notably, the Other Income of the company fell significantly from Rs 6.3 billion to Rs 2.5 billion on the back of depleting cash balance amid rising circular debt.
Despite the fact that PPL is more severely affected by circular debt buildup than peers, it has better potential to ramp up production from existing fields going forward, a report by Intermarket Securities said.
The report further underscored that GoP Sukuk issue may lead to a large inflow of cash for PPL, as this issue will likely focus on the gas/LNG chain. A greater than PKR50bn share for PPL will ease off cashflow issue materially, the report added.
|
Profit and Loss Account for the half-year ended December 31, 2019 ('000 Rupees) |
|||
|---|---|---|---|
|
|
Dec-19 |
Dec-18 |
% Change |
|
Revenue from contracts with customers |
85,630,629 |
79,056,837 |
8.32% |
|
Operating expenses |
(21,533,587) |
(19,593,804) |
9.90% |
|
Royalties and other levies |
(12,703,060) |
(11,640,697) |
9.13% |
|
Gross profit |
51,393,982 |
47,822,336 |
7.47% |
|
Exploration Cost |
(14,263,219) |
(8,188,649) |
74.18% |
|
Administrative expenses |
(1,331,102) |
(1,100,708) |
20.93% |
|
Finance cost |
(540,535) |
(280,453) |
92.74% |
|
Other charges |
(5,008,753) |
(4,301,360) |
16.45% |
|
other income |
2,556,801 |
6,344,601 |
-59.70% |
|
Profit before taxation |
32,807,174 |
40,295,767 |
-18.58% |
|
Taxation |
(8,362,644) |
(10,028,238) |
-16.61% |
|
Profit after taxation |
24,444,530 |
30,267,529 |
-19.24% |
|
Earning per share – basic and diluted (rupees) |
8.98 |
11.12 |
-19.24% |
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