Oil & Gas Development Company Limited (OGDC) announced its financial result today, posting a Profit after Tax of PKR 18,882mn (EPS: PKR 4.39) during 2QFY21 in contrast to PKR 24,782mn (EPS: PKR 5.76) in 2QFY20, declining by 24% YoY. Similarly, earnings in 1HFY21 settled at PKR 42,225mn (EPS: PKR 9.82), down by 20% YoY. Alongside the result, the company announced the second interim cash dividend of PKR 1.60/share (PKR 3.60/share in 1HFY21).

Result Highlights

· Net Sales in 2QFY21 witnessed a plunge of 15% YoY, clocking-in at PKR 54,632mn against PKR 64,195mn in SPLY attributable to i) 5% YoY drop in oil and gas production each ii) 33% YoY fall in oil prices. On a cumulative basis, topline dropped by 13% YoY, arriving at PKR 110,980mn. This decline came due to a dip in oil and gas production by 4% and 5% YoY, respectively.

· The exploration cost comes out to be PKR 2,266mn in 2QFY21, plunging by 65% YoY.This cost reduction is due to only one dry well (Sheen Dund-01) versus three dry wells in SPLY. Consequently, exploration costs during 1HFY21 settled at PKR 5,222mn, down by 50% YoY.

· Other income in 2QFY21 portrayed a massive decline of 89% YoY, clocking-in at PKR 640mn against PKR 6,059mn in SPLY, on the back of a fall in interest income along with higher exchange loss on foreign currency account. While, other income during 1HFY21 arrived at PKR 6,059mn, down by 50% YoY.

· The company booked effective taxation at 33% in 3QFY20 versus 34% in 3QFY19.

Courtesy – AHL Research