Pakistan Oilfields Limited (POL) announced its earnings for 1HFY15 to stand at Rs 5.3 billion. This showed a decline of 22.6 percent when compared with Rs 29.2 billion the company had earned in corresponding period of last fiscal year. The company's earning per share (EPS) also dipped to Rs 22.6 from 1HFY14's Rs 29.2. The company also announced first interim cash dividend of Rs 15 per share in 1HFY15, versus Rs 20 of FY14. The company's topline grew by a meager 0.5 percent in the period under review.
This, Topline analysts believe, was due to the depleting international oil prices as the POL's topline shrunk by 18 percent QoQ to Rs 8.1 billion in 2QFY15. During the first half of FY15, the company's oil production grew by 16.5 percent while gas production declined by 9.7 percent.
The company's gross margins at 58 percent rose from 56 percent of last year. "Increase was mainly due to lower-than-expected amortisation on development and decommissioning costs," said the analysts. In 2QFY15, the gross margins fell to 55 percent. Moreover, the analysts said, the company's lower amortisation resulted in 31 percent decline in finance costs while absence of dividend income from its associate, National Refinery Limited (NRL), resulted in 36 percent decline in other income. The exploration cost recorded at Rs 3 billion compared to Rs 844 million in FY14 that "significantly dented company's bottom-line".
"This is to due to Rs 2.8 billion cost booked in 2QFY15. This we believe is most probably a dry well booked by the company," said the analysts. The net margin declined to 30 percent in 1HFY15 compared to 39 percent in 1HFY14. Whereas, the POL's net margins in 2QFY15 stood at just 15 percent mainly due to high exploration cost and declining oil prices.