Pakistan Petroleum declares 21% decline in half year profit

KARACHI: Pakistan Petroleum Limited (PPL) has announced 21 percent decline in after tax profit for half-year period ended on December 31, 2019.

According to financial results submitted to Pakistan Stock Exchange (PSX) on Tuesday, the company declared net profit of Rs24.55 billion for the half year ended December 31, 2019 as compared with Rs31.04 billion in the same half of the last year.

The company declared earnings per share of Rs9.02 for half year ended December 31, 2019 as compared with Rs11.41 in the corresponding period of the last year.

The decline in profit has been mainly attributed to higher operating expenses and higher exploration expenses.

The operating expenses of the company increased to Rs21.34 billion for the period under review as compared with Rs19.45 billion in the half-year period ended December 31, 2018.

Similarly, exploration expenses grew to Rs11.74 billion for the half-year period ended December 31, 2019 as compared with Rs7.99 billion in the corresponding half of the last year.

The company declared decline of profit by 39 percent to Rs10.31 billion for quarter ended December 31, 2019 as compared with Rs16.85 billion in the same quarter of the last year.

Analysts at Topline Securities said that PPL’s reported lower than expected earnings during the outgoing quarter. This deviation from our estimates was mainly on account of higher than expected exploration expenses. Increase of 106 percent was seen YoY while on quarterly basis they increased by a massive 197 percent.

PPL’s revenue grew by 7 percent YoY in 2QFY20, despite a decline of 3 percent in oil production and a 12 percent decline in gas production, the analysts said.

Oil prices for the period didn’t fare well either declining 6 percent YoY for 2QFY20. The favorable exchange rate movement YoY was enough to post growth for the period under review YoY.

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