OGDC announced its 3qfy25 results earlier today, posting an NPAT of PKR 47.1 billion (EPS: PKR 10.96), down 1% year-over-year — in line with our expectations. The company also announced an interim cash dividend of PKR 3.0/share for the third quarter, bringing the cumulative nine-month payout to PKR 10.05/share (payout ratio: 33%).
- Net Sales stood at PkR104.5bn during 3QFY25, down 7%YoY, with the decline mainly attributable to i) reduced hydrocarbon production, ii) lower average oil prices (Arab light: US$78.3/bbl during 3Q, down 7%YoY).
- Regarding hydrocarbon production, OGDC’s estimated oil and gas output fell by 6%/6%/7%YoY during the quarter, reaching 32kbpd/684mmcfd/683tpd of oil/gas/lpg, respectively.
- Operating expenses for the quarter amounted PkR32.4bn, marking a 18%YoY increase. Additionally, exploration expenses totaled PkR6.8bn for 3QFY25, up 93%YoY. This was due to one-dry well plugged in the 100% owned Mari East Block (Chak202-2) during Feb’25.
- Finance income rose by 5%YoY as well, reaching PkR18.1bn, due to company’s substantial cash and investment balances of PkR203bn (up 45%YoY). Additionally, reversal of provisioning regarding accrued interest amounting to PkR3.6bn during the third quarter for TFCs also contributed to the increase in finance income.
- Effective tax rate clocked in at 30% during the quarter, compared to 41%/43% in 3QFY24/2QFY25.
- We reiterate our ‘BUY’ stance on OGDC with a Dec’25 target price of PkR372/sh, alongside a DY of 7% during the same period. Our outlook is strengthened due to the following aspects: i) strong production profile, ii) higher future exploration prospects on back of improving liquidity situation, iii) 8.33% stake in highly prospective Reko Diq Mining Project, iv) offshore working interests in Abu Dhabi Offshore Block-5, along with consortium partners and v) improvement in cash payouts.
Courtesy – AKD Research
