Mari Petroleum Company Limited (MARI) announced its financial result today, posting earnings of PKR 7,335mn (EPS: PKR 54.98) during 2QFY21 in contrast to PKR 7,285mn (EPS: PKR 54.61) in 2QFY20, up by 1% YoY. With this, the bottom-line in 1HFY21 clocked-in at PKR 16,401mn (EPS: PKR 122.94), up by 11% YoY. Along side the result, the company announced an interim cash dividend of PKR 6.00/share in 2QFY21.

Result Highlights

· Net Sales in 2QFY21 witnessed a growth of 13% YoY, settling at PKR 18,847mn against PKR 16,700mn in SPLY amid 27% and 13% YoY jump in oil and gas production, respectively. However, oil prices declined by 33% YoY in 2QFY21. On a cumulative basis, topline climbed up by 14% YoY, arriving at PKR 39,210mn in 1HFY21 on the back of 6% and 10% YoY uptick in oil and gas production, respectively, followed by 4% YoY Pak Rupee depreciation against greenback.

· The exploration cost jumped up by 23% YoY, reaching PKR 1,807mn in 2QFY21, which is attributable to a higher prospecting expenditures. Similarly, the total exploration cost during 1HFY21 comes out to be PKR 3,027mn, down by 14% YoY.

· The other expenses plunged by a massive 98% YoY, clocking-in at PKR 3mn in 2QFY21 due to noteworthy loss in seismic unit in the prior year. While, other income during 1HFY21 arrived at PKR 15mn against PKR 161mn in 1HFY20.

· The company booked effective taxation at 29% in 2QFY21 similar to same period last year.

Recommendation

· Currently, we have a ‘BUY’ stance on the stock with Dec’21 target price of PKR 1,962.5/share.

Courtesy – AHL Research