KARACHI – Pakistan Oilfields Limited (POL) has reported a remarkable surge in net profit, with a substantial 66 percent increase for the six-month period ending on December 31, 2018.
The financial results for the first half of 2018, released on Tuesday, revealed that the company achieved a profit after tax of Rs7.88 billion, compared to Rs4.76 billion for the same period in the previous year.
The company’s earnings per share (EPS) also demonstrated a noteworthy rise, reaching Rs27.79, in contrast to the previous year’s Rs16.77. This significant financial performance has been attributed to various factors, as analysts at Taurus Research pointed out.
In the second quarter of the fiscal year 2019 (2QFY19), the company posted a profit after tax of Rs4.0 billion, with an EPS of Rs14.17, compared to Rs7.85 in 2QFY18, marking an impressive 80.6 percent year-on-year (YoY) increase. This substantial growth was primarily attributed to the pricing adjustment in the TAL block during the same period in the previous year.
In line with these positive results, Pakistan Oilfields Limited has announced a cash dividend of Rs20.00 per share, providing an additional benefit to its shareholders.
During 2QFY19, the company’s net sales experienced a remarkable 94.0 percent growth, reaching Rs11.6 billion. The key drivers behind this surge were the devaluation of the Pakistani rupee by 26.1 percent on an average basis and a 15.8 percent YoY increase in the price of oil.
Exploration costs during this period declined by a significant 83.1 percent YoY, dropping to Rs0.1 billion. This reduction was primarily attributed to lower seismic activity and the absence of expenses related to dry wells.
However, it’s important to note that other income and finance costs both experienced substantial changes, rising by 73.7 percent and 1.8 times, respectively, on a YoY basis. These figures exceeded the expectations of analysts.
The increased other income is believed to be a result of exchange gains on foreign currency deposits. Meanwhile, higher finance costs are attributed to two key factors: exchange losses and an increase in provisions-unwinding amounts.
Pakistan Oilfields Limited’s impressive financial performance for the first half of the fiscal year 2018 reflects the company’s strong position in the industry and its ability to capitalize on favorable market conditions. The surge in net profit and earnings per share demonstrates the company’s commitment to delivering value to its shareholders.
The increase in net sales is largely driven by the devaluation of the rupee and rising oil prices, factors that have provided the company with an advantage in the current economic landscape. The reduction in exploration costs further underscores the efficiency of the company’s operations.
Despite the increase in other income and finance costs, Pakistan Oilfields Limited’s financial results reveal a robust performance, reflecting the company’s sound financial management and its ability to navigate the challenges and opportunities within the oil and gas sector.
With a positive outlook for the company and a commitment to providing value to shareholders, Pakistan Oilfields Limited continues to play a significant role in Pakistan’s energy industry, contributing to the nation’s economic growth and stability.
