AHCML Research has released a significant report on Oil & Gas Development Company Limited as part of its review of results for 4QFY25. The company is expected to report a profit after tax (PAT) of PKR 37,467 million, translating to an earnings per share (EPS) of PKR 8.71 for 4QFY25. This reflects a 1% decrease compared to the previous year.

Net sales for the quarter are projected to reach PKR 92,449 million, representing a 20% year-over-year decline, primarily due to reduced hydrocarbon production. Gross margins are estimated at 60.13%, reflecting an increase of 4.08% compared to the same period last year.

The average price of Arab Light crude oil has fallen from USD 78.33 to USD 68.61, marking a decrease of USD 9.72 per barrel. Additionally, exploration and prospecting expenses are expected to rise by 43% year-over-year. Other income is anticipated to increase by 619% year-over-year, largely due to impairment and exchange losses experienced last year.

The average discount rate stood at 11% in 4QFY25, down from 20.5% in 4QFY24 and 12% in 3QFY25. This reflects a significant decline of 9.5 percentage points year-over-year and 1 percentage point quarter-over-quarter. Consequently, finance costs are expected to decrease by 25% year-over-year.

We forecast a dividend per share (DPS) of PKR 3 for the period, which would bring the total accumulated DPS for the year to PKR 13.50.