At a time where the country is falling in a gasless pit, Pakistan Petroleum Limited (PPL) has emerged as a survivor. When it comes to its performance, the company has been able to meet the sanguine expectations quite precisely. PPL stood to its promise of growth as a prime focus. Compared to 1HFY11, the sales of the company have witnessed an impressive growth of 21 percent during 1HFY12. With daily gas production of 1 bcfd from PPL-operated and partner -operated fields, the company undoubtedly accounts for one fourth of total domestic gas production. With EPS of Rs15.30, the rise in the earnings for the half year was in line with the rise in sales revenues. Backed by relatively higher international oil prices, domestic wellhead gas price, volumetric increases due to rising demand and rupee depreciation, the company was able to push its earnings per share up by 21 percent during 1HFY12. An even bigger contributor to the profits has been the sources of income other than the top line: the investments the company has made during the 1HFY12 and especially the 2QFY12. Analysts at JS Research indicate increasing interest income through investments in T-bills and bank placements Breaking the spell, field expenditure soared for PPL. Due to circular debt issue and security situation especially in Balochistan, drilling activity and search for new hydrocarbons has remained very slow during the first half of FY12. The activity continued to be skewed towards development activities with E&P sector falling short of the targets set. Although PPL drilled 1 development well and no exploratory well during 1HFY12, it aims to achieve its target of 3-4 wells in total. Coupled with inefficiency of subsequent petroleum policy to translate the revised gas wellhead price to the previous licenses, recently some wells have been suspended or declared dry. Such write offs can make a significant portion of the rising field expenditures. However, the company inculcates a scrupulous drive towards adopting new technology. Pakistan Petroleum Limited continues its ambitious program of exploring both conventional and unconventional reservoirs. The company is the first to attempt to bring shale gas exploration to the countrys E&P map and attract the foreign investors amid the falling FDI.\
======================================================================= Pakistan Petroleum Limited ======================================================================= (Rs mn) 1HFY12 1HFY11 chg 2QFY12 2QFY11 chg ======================================================================= Net sales 45,257 37,416 21% 22,610 19,197 18% Field expenditure 12,168 9,979 22% 6,475 5,573 16% Other operating income 3,456 1,910 81% 1,872 959 95% Finance cost 88 110 -20% 45 57 -22% Profit afte tax 20,113 16,618 21% 10,227 8,829 16% Profit margin 44% 44% 45% 46% EPS (Rs) 15.30 12.64 21% 7.78 6.72 16% =======================================================================
Source: KSE notice
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