Pakistan Oilfields Limited (POL) announced its financial result today, posting a Profit after Tax of PKR 5,665mn (EPS: PKR 19.96) during 2QFY22 against PKR 3,021mn (EPS: PKR 10.64) in 2QFY21, significantly up by 88% YoY. Furthermore, the profitability during 1HFY22 settled at PKR 10,923mn (EPS: PKR 38.48), up 64% YoY. In addition to this the company announced an interim cash dividend of PKR 20.00/share in 2QFY22 (PKR 20.00/share in 2QFY21).

Result Highlights

·        Net sales in 2QFY22 climbed up by 44% YoY, clocking-in at PKR 12,610mn against PKR 8,773mn during SPLY as a result of  i) 79% YoY surge in realized oil prices and ii) 8% YoY Pak Rupee depreciation against USD. Meanwhile, oil and gas production plummeted by 10.2% and 9.7% YoY, respectively. Whereas, topline in 1HFY22 clocked-in at PKR 23,687mn, witnessing a growth of 35% YoY given a 71% YoY hike in average realized oil prices.

·        The exploration costs ascended by 3x YoY in 2QFY22, arriving at PKR 108mn compared to PKR 34mn in SPLY, given higher geological and geophysical cost during the period. On a cumulative basis, exploration costs during 1HFY22 reached PKR 559mn, up by 5x YoY owed to higher seismic activity.

·        Other income depicted a massive jump of 8x YoY, reaching PKR 2,018mn during 2QFY22 in contrast to PKR 242mn during the same period last year. This massive increase comes on the back of exchange gain on foreign currency tagged with higher income from bank saving accounts, deposits and investments. Similarly, other income during 1HFY22 comes out to be PKR 4,718mn, up 8x YoY.

·        The company booked effective taxation at 36% in 2QFY22 vis-à-vis 39% in 2QFY21.

Recommendation

Currently, we have a ‘BUY’ call on the stock with a Dec’22 target price of 546.5/share.

Courtesy – AHL Research