KARACHI: Oil and Gas Development Company Limited’s (OGDCL) profit soared 57% to Rs27.73 billion in the quarter ended September 30, 2018 on the back of higher sales, other income and share of profit in the associated firm.
The profit of the company had been Rs17 billion in the same quarter last year, according to the profit or loss account sent to the Pakistan Stock Exchange (PSX) on Thursday.
Also Read: Rs200b receivables threaten OGDCL stability
Accordingly, earnings per share surged to Rs6.22 in the quarter under review compared to Rs3.95 in the corresponding quarter of previous year. The board of directors recommended first cash dividend of Rs2.75 per share. The entitlement will be paid to the shareholders whose names appear in the register of members on December 12, 2018.
OGDCL’s share price decreased 0.82%, or Rs1.24, to Rs150.47 with 665,600 shares changing hands at the PSX.
Net sales of the oil and gas exploration firm increased around 41% to Rs61.79 billion compared to Rs43.96 billion last year. The growth in sales came on the back of higher Arab Light oil prices, up 50% year-on-year, rupee devaluation against the greenback, providing support to dollar-linked revenues and higher gas volumes,” Topline Securities’ analyst Nabeel Khursheed said while talking to The Express Tribune.
However, oil production fell around 4% year-on-year in the quarter under review “largely on account of natural depletion in major fields like Qadirpur and Nashpa and some technical issues at various wells such as Tando Alam and Kunnar,” he said.
Other income increased 32% to Rs4.09 billion compared to Rs3.11 billion last year.
“Other income grew mainly on the back of exchange gain of Rs855 million thanks to rupee devaluation against the greenback,” the analyst said.
Share of profit in the associate (net of taxation) surged 125% to Rs1.02 billion compared to Rs456.81 million last year. The firm booked profit from the associate due to improvement in the profitability of Mari Petroleum. On the flip side, the exploration cost rose 29% to Rs1.96 billion compared to Rs1.52 billion last year. “Exploration charges rose on the back of a dry well cost, we believe,” he said.
Workers’ profit participation fund increased 61% to Rs2.07 billion from Rs1.28 billion. “We flag volatility in international oil prices, lower-than-expected hydrocarbon production and significant exploration and development cost as key risks for OGDC,” Khursheed said.
Published in The Express Tribune, October 26th, 2018.