Pakistan Petroleum Limited (PPL) has reported a significant 24% decrease in its profit after tax (PAT) for the quarter ending September 30, 2024. PPL’s PAT fell to Rs22.69 billion, compared to Rs29.76 billion during the same period last year, as the company contends with reduced sales and increased operational expenses.
In a statement shared with the Pakistan Stock Exchange (PSX) on Tuesday, PPL disclosed that its board of directors met on October 29 to assess the company’s financial performance for the quarter. In light of these results, the board declared an interim cash dividend of Rs2 per share (20%) on both ordinary and convertible preference shares for the fiscal year ending June 30, 2025.
The company’s earnings per share (EPS) dropped to Rs8.34 for the first quarter of FY2025, down from Rs10.94 in the same period last year. The decline is largely due to higher operational costs and a dip in revenues, as reflected in PPL’s financials.
On a consolidated basis, PPL’s revenue from customer contracts fell to Rs66.79 billion in the first quarter of FY2025, a 14% drop from Rs78.01 billion in the same period last year. This decline, combined with rising expenses, resulted in a 22% reduction in gross profit, which stood at Rs40.93 billion compared to Rs52.79 billion in the previous year. The company’s profit margin also took a hit, falling to 61.2% from 67.6% over the same period.
One of the key challenges facing PPL has been an increase in exploration and operational costs. Exploration expenses surged by 25% in the first quarter, while administrative costs rose by a substantial 35% year-on-year. Despite these cost pressures, PPL managed to reduce other charges by 7%, totaling Rs4.1 billion for the quarter. However, the company saw a promising 67% rise in other income, which reached Rs6.49 billion compared to Rs3.88 billion in the previous year, offering some cushion to the overall financial performance.
Before tax, PPL’s profit stood at Rs37.87 billion, down from Rs47.72 billion in the same quarter of FY2024. The company’s tax expenses also fell by 15%, totaling Rs15.2 billion compared to Rs17.9 billion previously.
Founded in 1950, PPL has long been a key player in Pakistan’s energy sector, focusing on the exploration, development, and production of oil and natural gas. The recent financial performance underscores the operational challenges facing the energy sector, as PPL continues to navigate rising costs and fluctuating market dynamics.