Despite sales drop, PPL profitability remains in line
- The company’s sales revenue decreased by Rs 2.533 billion during the current period i.e. Rs 39.226bn as compared to the corresponding period i.e. Rs 41.751bn.
Despite witnessing a drop in sales, Pakistan Petroleum Limited (PPL), one of the country’s leading oil and gas exploratory firm managed to post a Profit after Tax (PAT) of Rs 14.351 billion for the quarter ended on September 30, 2020, as compared to Rs 14.237bn posted in the same period last year.
The company’s sales revenue decreased by Rs 2.533 billion during the current period i.e. Rs 39.226bn as compared to the corresponding period i.e. Rs 41.751bn. The decline is due to negative variance on account of price including exchange rate amounting to Rupees 3.014bn, partially offset by positive volume variance of Rs 481mn.
The negative price variance is due to a decrease in average international crude oil prices from $62.26 per barrel in the corresponding period to $43.36 per barrel during the current period partially offset by the devaluation of the Pak rupee against the US Dollar.
In addition, positive volume variance is mainly attributable to Sui, Gambat South, Adhi, Tal, and Kirthar fields partially offset by a decline in production from Kandhkot and Nashpa fields.
Overall profitability for the period remained in line with the corresponding period where the impact of the decline in sales revenue was mitigated by reduced exploration expenses and other charges which stood at Rs 5.471bn in the period as compared to Rs 8.102bn recorded in the same period last year.
Decline in exploration expenses is mainly driven by a lower cost of dry wells charged to profit or loss during the current period.
Variation in other charges is a result of impairment loss on investment in PPL Asia E&P B.V. in the corresponding period, coupled with a decline in exchange loss owing to lesser volatility in the USD/PKR parity during the current quarter.
The company’s overall collections during the period from customers improve as compared to last quarter but remain below the additional billings during the period, thus resulting in a further 5pc increase in total receivable which stood at Rs 326bn by September 30, 2020, as compared to Rs 312bn on June 30 2020.
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