POL Reports 192% Increase in Earnings

Staff Report:
Pakistan Oilfields (POL) reported a 195% quarter-on-quarter increase in its earnings to Rs26.7 per share, bringing its first-half FY25 earnings to Rs35.7 per share, a 42% year-on-year decline. The earnings were in line with market expectations.

Earnings rose on a quarterly basis due to a 92% reduction in exploration costs to Rs626 million, as the company had encountered a dry well in the previous quarter. However, on an annual basis, earnings fell by 4% year-on-year, primarily due to a 15% decline in crude oil prices and production curtailments.

Royalty expenses amounted to Rs1.6 billion, down 15% year-on-year, aligning with the decline in sales. This reflects a royalty-to-sales ratio of 10.8% during the second quarter of FY25.DGKC Reports 4QFY24 Loss, Full-Year EPS Below Expectations

Operating costs decreased by 5% year-on-year to Rs3.5 billion, representing 24% of net sales in the second quarter of FY25 compared to 21% in the same period last year.

The effective tax rate stood at 37% during the second quarter, compared to 39% in the corresponding quarter of FY24, bringing the first-half FY25 tax rate to 39%.

Alongside the results, the company announced a dividend of Rs25 per share for the first half of FY25, indicating a payout ratio of 70%. This dividend was at the higher end of market expectations, which ranged from Rs15 to Rs25 per share.

The company is currently trading at a FY26/27 price-to-earnings ratio of 6.5x/6.2x.