Pakistan Oilfields Limited (PSX: POL) announced a 22 percent year-on-year increase in its earnings for the first half of FY24 (1HFY24) and the key factor behind the bottom line growth was weakening domestic currency against the greenback. The company’s topline grew by 13 percent year-on-year in 1HFY24, primarily due to weaker currency during the period. This can be seen from the continuing decline in oil and gas production which was down by around 6 and 3 percent year-on-year. POL’s revenues during 2QFY24 were up by 13 percent year-on-year again primarily due to weakening currency. During the quarter, the realized oil prices decreased by one percent year-on-year, and the company’s oil and gas production showcased a drop of 5 percent and 3 percent, respectively.
The company’s exploration cost also dropped significantly, which supported the bottom line. POL’s exploration costs dropped by 79 percent year-on-year during 1HFY24, and by 57 percent year-on-year amid the absence of a dry well as compared to last year. The other income depicted a decline of 11 percent year-on-year, on account of exchange loss on foreign currency against exchange gains. However, the company incurred 37 percent year-on-year growth in other income during 2QFY24.
Depleting reserves and small discoveries have been a highlight of the E&P landscape with falling oil and gas production. POL has been facing the same challenges. Overall, POL’s bottom line growth stood at 22 percent for 1HFY24, and 32 percent year-on-year for 2QFY24.