After a growth year for earnings in FY22, the exploration and production sector’s earnings are roaring in FY23 so far. Mari Petroleum Company Limited (PSX: MARI) announced its financial performance for the first half of FY23 with impressive growth in earnings. After a good 1QFY23 where revenues grew by 53 percent and earnings grew by 40 percent year-on-year, MARI posted growth of around 35 percent in net sales and an increase of 49 percent year-on-year in the bottom line for 2QFY23.

Overall, 1HFY23 topline growth stood at 44 percent year-on-year, while the bottom line was also seen rising by 44 percent year-on-year.

Mari’s net sales clocked in at Rs61 billion for the 1HFY23, the highest half-yearly topline posted in the company’s history. The growth in revenues was primarily driven by the 24 percent devaluation of the domestic currency. Also, the revenue growth was driven by higher prices. There was a 67 percent year-on-year jump in the wellhead price of Mari Gas Field. The growth in the E&P’s topline offset the decline in production flows. Lower production from the Mari gas field during the first half (1HFY23) was due to annual turnarounds of EFERT and FFC plants that hampered the off-takes from the MARI field. Also, the leakages at FFC’s plant and damaged SSGC pipeline in the Bolan area during Aug’22 in the early months of FY23 were also factors for lower production volumes as per a research note by AKD Securities Limited.

On the expense side, the company witnessed colossal exploration and prospecting expenditure, which was due to the increase of two dry wells during the period. Also, the company witnessed a decline in the share of loss from associates.

The rise in topline trickled down, and the company posted growth of around 44 percent year-on-year in profits before tax for 1HFY23. This was despite higher operating expenses, finance costs, and other charges during the quarter.