MARI Energies Ltd. (MARI) reported 4QFY26 NPAT of PKR37.2bn (EPS: PKR30.95), up nearly double YoY and 78% QoQ. Reported earnings significantly exceeded our expectation of PKR13.41/sh, primarily driven by a one-off tax reversal of PKR18.3bn, reflecting the favorable Federal Constitutional Court (FCC) verdict on the Super Tax for E&P companies announced in Jan’26. Excluding this non-recurring item, underlying profitability remained softer than expected, with PBT falling below our estimates. This brings FY26 earnings to PKR86.9bn (EPS: PKR72.36), up 33% YoY. The company also announced a cash dividend of PKR18.7/sh, ahead of our expectation of PKR14.0/sh, taking FY26 DPS to c.PKR27.0.
Key highlights of 4QFY26 results:
§ Net sales clocked in at PKR53.4bn, broadly in line with our expectations, increasing 19% YoY and 11% QoQ. The YoY growth was primarily driven by stronger oil prices (+51% YoY), alongside higher hydrocarbon production.
§ Operating and administrative expenses increased 34% YoY, likely reflecting higher security costs across sensitive operating areas.
§ Exploration expense rose 58% YoY to PKR8.3bn as MARI continued to invest in reserve replacement and exploration activities. The temporary suspension of operations at the Sumro-1 well may also have contributed, although we await further disclosure for confirmation.
§ Finance income declined 38% YoY to PKR1.7bn, likely due to lower cash and ST Investment balances, despite slightly higher interest rates YoY.
§ The company reported a net tax reversal during the quarter, compared with an effective tax rate of 1% in 3QFY26 and 13% in 4QFY25. We had assumed an effective tax rate of 35%.
While reported earnings were exceptionally strong, the headline beat was almost entirely attributable to the one-off tax reversal rather than an improvement in underlying operating performance, with pre-tax earnings falling short of our expectations. That said, the FCC’s favorable ruling on the Super Tax is expected to provide an incremental earnings uplift over the coming years. Separately, we expect earnings momentum to improve as gas offtakes continue to normalize and production ramps up across key fields. We maintain our Buy rating on MARI with a Jun-27 target price of PKR785/sh.
MARI 4QFY26 Result – Consolidated | ||||||
(PKRmn) | 4QFY26 | 4QFY25 | YoY | FY26 | FY25 | YoY |
Net Sales | 53,364 | 44,802 | 19% | 191,664 | 177,097 | 8% |
Royalty and wellhead charge | 12,552 | 10,454 | 20% | 45,717 | 35,611 | 28% |
Gross Profit | 40,812 | 34,348 | 19% | 145,947 | 141,486 | 3% |
Operating & Admin Exp. | 12,768 | 9,530 | 34% | 44,452 | 41,113 | 8% |
Exploration Expense | 8,281 | 5,235 | 58% | 17,233 | 14,862 | 16% |
Other charges | 1,070 | 648 | 65% | 4,838 | 5,359 | -10% |
Operating Profit | 18,694 | 18,936 | -1% | 79,425 | 80,151 | -1% |
Finance cost | 1,526 | 938 | 63% | 4,490 | 3,489 | 29% |
Other income | (160) | 356 | n.m. | 2,058 | 966 | 113% |
Finance income | 1,722 | 2,794 | -38% | 6,340 | 10,674 | -41% |
Share of loss/income in associate | 52 | 629 | -92% | (304) | 291 | n.m. |
Profit Before Taxation | 18,783 | 21,778 | -14% | 83,029 | 88,593 | -6% |
Taxation | (18,335) | 2,928 | n.m. | (3,796) | 23,212 | n.m. |
Profit After Taxation | 37,119 | 18,850 | 97% | 86,825 | 65,381 | 33% |
Attributable profit | 37,159 | 18,849 | 97% | 86,878 | 65,369 | 33% |
EPS (PKR) | 30.95 | 15.70 | 72.36 | 54.45 | ||
DPS (PKR) | 18.70 | 21.70 | 27.00 | 21.70 | ||
Source: Company Announcement, IMS Research | ||||||
Courtesy – IMS Research
