FY24: Mari Petroleum’s best profits yet

Mari Petroleum Company Limited (MARI) has announced its financial results for FY24, showcasing record-breaking performance with significant growth in profitability.

The revenue growth for E&P company in FY24 was primarily driven by a combination of increased hydrocarbon sales volume, higher wellhead prices, and the depreciation of the Pakistani Rupee. Specifically, the company saw a 7 percent year-over-year rise in hydrocarbon sales. Additionally, the wellhead price for Mari Gas Field increased by 19 percent year-on-year, significantly boosting revenues. The 12 percent year-on-year devaluation of the Pakistani Rupee against the US Dollar further augmented the revenue, as earnings in foreign currency translated into higher amounts in local currency. These factors collectively contributed to a 2inc5 percent year-on-year increase in net sales for FY24 compared to the previous year, despite some quarterly fluctuations due to operational challenges.

On the expense side, MARI’s operating expenses for FY24 reflected a 32 percent increase year-over-year. In the final quarter (4QFY24), operating expenses decreased 11 percent yearly. This reduction in the quarterly figures was partly due to effective cost-management practices and lower operational activities during the maintenance shutdowns by fertilizer customers.

A significant factor influencing MARI’s expense profile was the reversal of exploration expenses in 4QFY24. For the full year, exploration expenses decreased by 19 percent year-on-year. This reversal was mainly due to the absence of dry wells and lower costs associated with exploration activities during the period.

Finance costs for MARI for FY24 jumped by 61 percent year-on-year, reflecting the impact of higher interest rates. In contrast, finance income for the year was relatively stable, supported by elevated short-term investments and higher prevailing interest rates.

Revenue growth, effective cost management, stable finance income, and favorable taxation all led to an increase in the company’s profitability. MARI’s net earnings for FY24 were up by 38 percent year-on-year. MARI secured a five-year extension of its Mari D&P lease until November 2029, with an additional payment of 15 percent wellhead value, the company documents show. The company’s subsidiary, Mari Mining Co. (Pvt) Ltd, was awarded two mineral exploration licenses in Balochistan’s Chaghi district. Furthermore, the Board of Directors approved the formation of a subsidiary focused on Cloud Computing and Artificial Intelligence.

Additionally, MARI announced an 800 percent bonus issue, meaning shareholders received eight additional shares for every one share held. This generous bonus issuance underscores the E&P company’s robust financial health as the issuance of bonus shares is a strong indicator of the company’s confidence in its prospects and financial stability. Alongside the bonus shares, MARI declared a final cash dividend of PKR 134 per share for 4QFY24, bringing the total FY24 payout to PKR 232 per share, a 58 percent increase from the previous year. The company was able to post its highest-ever achievements in profit, quarterly earnings, dividend payout, and bonus share issuance.