Pakistan: Financial Results of POL and PPL

PPL RigThis week is being watched closely by the investors in companies belonging to Pakistan’s energy chain as some major companies are scheduled to announce their financial results for the year ended June 30, 2013. Out of the major exploration and production companies, Pakistan Oilfield announced its results on Thursday and Pakistan Petroleum is scheduled to announce its results on Friday.

Pakistan Oilfield Limited (POL)  came out with reduced income and posted profit after tax of Rs10.8 billion (EPS: Rs45.78), earnings were down by 9%YoY as compared to the previous year mainly due to: 1) higher exploration expenses, up by 202%YoY and 2) lower other income, down by 23%YoY. Despite reduced profit, POL Board of Directors approved final dividend of Rs25/share, taking the full year payout to Rs45/share. For 4QFY13, POL posted net profit of Rs2.2 billion (EPS: Rs9.32), down sequentially by 26% and below the forecast of Rs2.6 billion (EPS: Rs11.06). Earnings deviation was primarily due to higher exploration costs (+59%QoQ), most likely due to expensing of dry well Sadrial-I.

Pakistan Petroleum Limited (PPL) is scheduled to announce its full year result today (Friday). Earnings are estimated to grow by 7%YoY to Rs43.6 billion (EPS: Rs26.54). For 4QFY13, analysts forecast PPL’s earnings to slip by 10%QoQ to Rs10.0 billion (EPS: Rs6.13) following a 9%QoQ drop in revenues to Rs24.1 billion. PPL is expected to announce a final dividend of Rs7/share taking full year dividend to Rs12/share. The company can also surprise with a bonus issue of 10 to 15 per cent.

Earnings growth is underscored by 5%YoY increase in revenues to Rs101.3 billion, driven by higher oil production. Other income for the year is estimated at Rs7.1 billion; down by a significant 38%YoY as last year’s other income was boosted by a reversal of Rs4.4 billion in provisioning for WWF. For 4QFY13, PPL’s earnings is likely to decline to Rs24.1 billion due to reduction in gas production and lower oil prices



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