PPL shows swiftness

The gas production giant contributing over a quarter to the indigenous gas production revealed its performance for 3QFY12 and the cumulative nine months of FY12 yesterday. Pakistan Petroleum Limited did undoubtedly well by posting a healthy profit that came as no surprise to the market.
After a dreary performance during CY11, PPL stock has gained pace due to the recent activity regarding the initiation of the Secondary Public Offering (SPO) of the stock.
Backed by stubbornly higher international oil prices averaging $112 per barrel during 9MFY12 the top line expanded by 24 percent during 9MFY12 to almost Rs.72 billion from Rs.58 billion for 9MFY11.
Likewise, the earning of the Company for 9MFY12 ballooned by more than 30 percent over the comparable period of FY11, with EPS growing from Rs.18.52 to Rs.24.55. For 3QFY12, the net profit grew from Rs.7.7 billion for 9MFY11 to Rs.12.2 billion for 9MFY12, a growth of a fat 57 percent.
A major reason that transpired the bottom line growth is the blissful oil production from PPLs fields like Tal, Nashpa, Kandot and Adhi. However, a flatter gas production during 9MFY12 with decreased production from Sui, Hala, Sawan and the likes acted as deterrents. Moreover, the higher realised gas wellhead prices supported the expansion in the bottom line.
During the mentioned period, the field expenditure rose by 22 percent for 9MFY12 on account of 2D seismic acquisition, E&P activity skewed towards development activities and higher depreciation and amortisation costs. This rise in field expenditure was compensated by a fall in finance costs by 18 percent during 9MFY12 in contrast to 9MFY11.
An even bigger contributor to the profits came from the sources of income other than the operating ones. The Company was able to churn higher earnings from the rise in interest income owing to the cash balances and investments in the form of T-bills.
Going forward, the Company has shown serious intentions and taken sound steps to invest in hydrocarbon-rich Iraq to explore opportunities across national boundaries especially when domestic opportunities seem flat.