For quite some time the E in the E&P companies was not so active, but PPL seems to have changed that with an aggressive exploration activity of late. Little wonder! The heightened drilling and exploration activities have started to translate into profits for the state owned entity. The firms profits went up 19 percent year on year for 1H FY14, and the market expects the momentum to continue.
The strong top line performance was consistent with the firms production growth which was skewed towards oil flows. The oil production, according to market sources is believed to have jacked up by a significant 31 percent year on year, more than making up for the slide in gas production.
Considerable currency depreciation against the greenback during the period also aided PPLs top line growth, which was further boosted by improvement in price. PPL has made significant strides this year, already engaged in drilling of three exploration wells. The year-end drilling target for PPL this year is five, and it seems well and truly on track. This is a massive turnaround when seen in the light of previous three years, where PPL had only spudded four exploratory wells.
There is increased investors interest in PPL especially after governments intentions of divesting its shares by another 10 percent. Contrary to earlier perceptions, PPL might outperform its peers given the strong fundamentals and aggressive plans in the core business, going forward.
===================================================
Pakistan Petroleum Limited
===================================================
Rs (mn) 1HFY14 1HFY13 chg
===================================================
Sales 58476 50673 15%
Field expenditure 13557 13617 0%
Royalties 7031 6047 16%
Gross profit 37888 31009 22%
Gross margin 65% 61%
Other income 3688 3899 -5%
Other expenses 2068 1762 17%
PAT 26506 22307 19%
EPS (Rs) 13.44 11.31
===================================================
Source: KSE notice
Comments
Comments are closed.