The management of Pakistan Petroleum Limited (PPL) is expected to announce its 9MFY23 on 27th Apr’23. We anticipate the company to post profitability of PKR 77,993mn (EPS: PKR 28.66) in 9MFY23 compared to PKR 52,329mn (EPS: PKR 19.23) in 9MFY22, depicting a jump of 49% YoY.

The growth in earnings comes on the back of i) 16% YoY increase in Sui wellhead price, and ii) increase in oil prices by 10% YoY. On the other hand, during 3QFY23, net profit is expected to register a jump of 41% YoY, clocking in at PKR 29,057mn (EPS: PKR 10.68). The surge in earnings is attributable to i) growth in oil and gas production by 8% and 2% YoY, respectively, ii) 32% YoY PKR devaluation against USD, and iii) higher Sui wellhead price (up by 14% YoY).

Furthermore, we expect the exploration expense to increase by 14% YoY in 3QFY23 to PKR 1,626mn owing to higher 2D and 3D seismic activity during the quarter. In addition to this, the company is projected to record other income of PKR 8,115mn, up by 2.6x YoY on account of exchange gain worth ~PKR 4.2bn expected during the quarter.

Courtesy- AHL Research