POL’s quarterly profit rises to Rs12.4bn as sales surge and exploration costs fall sharply
KARACHI: Pakistan Oilfields Limited (POL) recorded a profit after tax of Rs12.4 billion in the fourth quarter of fiscal year 2025-26 (4QFY26), marking a 67% year-on-year (YoY) and 59% quarter-on-quarter (QoQ) increase.
According to a review by Topline Securities Limited, POL’s earnings per share (EPS) stood at Rs43.69 during the quarter, while full-year earnings reached Rs112.45 per share, representing a 32% YoY increase.
The quarterly earnings exceeded market expectations, supported by stronger-than-anticipated revenue, significantly lower exploration costs and a lower-than-expected tax expense.
Exploration costs fall sharply
During FY26, POL’s exploration costs declined 58% YoY to Rs4.7 billion.
In 4QFY26, exploration expenses stood at Rs133 million, down 91% YoY and QoQ amid subdued exploratory activity during the quarter. Topline Securities had estimated exploration costs of Rs750 million for the period.
Sales rise 64% in fourth quarter
POL reported net sales of Rs20.1 billion in 4QFY26, up 64% YoY and 32% QoQ. The figure was also higher than Topline Securities’ estimate of Rs18.4 billion.
For the full fiscal year, sales reached Rs63 billion, representing a 10% YoY increase.
The annual improvement was attributed to higher oil and gas production volumes during the year, along with stronger realised oil prices.
Tax rate remains below expectations
POL’s effective tax rate stood at 19% in 4QFY26, significantly below the 30% rate expected by Topline Securities.
According to the brokerage’s review of POL’s quarterly reports, the company has stopped making provisions for super tax over the past two to three quarters.
Topline Securities noted that POL had yet to record a reversal of previous provisions relating to super tax, either partially or fully, depending on the pending PCAs.
Royalty expense increases
POL’s royalty expense rose 61% YoY and 25% QoQ to Rs2.1 billion in 4QFY26.
For the full fiscal year, royalty expenses stood at Rs7.1 billion, up 10% YoY.
Royalty charges accounted for 10.9% of sales during 4QFY26, compared with 11.1% in the same quarter of the previous year and 11.5% in 3QFY26.
Operating expenses surge
Operating expenditures (OPEX) amounted to Rs3.6 billion during the fourth quarter, representing a 6.9-fold YoY increase.
The sharp rise was partly due to the low comparison base, as POL had recorded a Rs1.9 billion reversal in amortisation costs in 4QFY25.
Meanwhile, other income stood at Rs2.9 billion, down 11% YoY but up 10% QoQ. Full-year other income reached Rs9.7 billion, declining 33% YoY.
POL declares Rs72.50 dividend
The company declared a cash dividend of Rs72.50 per share for 4QFY26, taking its total dividend for FY26 to Rs100 per share.
The full-year dividend represented a payout ratio of 89%, marginally higher than the 88% recorded in FY25.