Mari Energies reports 42pc QoQ decline in earnings to Rs9.3/share

ISLAMABAD: Mari Energies Limited reported 42 percent QoQ decline in its earnings to Rs9.3 per share primarily because of higher operating expenditures and higher royalty expense.

The result was below expectations as market was expecting earnings of Rs11-14/share.

In addition, unlike street expectations of Rs10-15/share, company did not declare any cash dividend for first half of fiscal year 2025.

Operating expenditure clocked in at Rs15 billion, up 115 percent year-on-year or 37 percent of the net sales in second quarter fiscal year 2025 compared to 18 percent of net sales in the first quarter of the current fiscal year.

While royalty expense clocked in at Rs8 billion, up 39 percent year-on-year or 19 percent of the net sales in second quarter of the fiscal year compared to 12 percent in first quarter of the current fiscal year.

Higher royalty expense in outgoing quarter is a result of imposition of additional royalty of 15 percent from November 2024 on Mari field, Topline Research states.

We await further clarity on higher operating expenditures, the Topline says.

Effective tax rate of company clocked in 25 percent in second quarter of fiscal year 2025 compared to 34 percent recorded in first quarter of current fiscal year and 40 percent in second quarter of the current fiscal year 2024.

Effective tax rate in 1HFY25 reached 31 percent.

This takes 1HFY25 earnings to Rs25.32/share, down 19 percent year-on-year led by eight percent decline in net sales, 58 percent increase in operating expense, and 106 percent increase in exploration cost. Mari is currently trading at FY26/27 PE of 7.3x/6.8x.

Copyright Business Recorder, 2025