KARACHI: Mari Energies Limited (MARI) reported a decline of 18 percent quarter-on-quarter in its earnings for the second quarter of FY26, posting a profit of Rs10.66 per share, as higher-than-expected operating and exploration costs eroded margins.
Despite the quarterly decline, the company recorded a 15 percent year-on-year increase in earnings for the quarter. However, cumulative earnings for the first half of FY26 stood at Rs23.89 per share, reflecting a 6 percent year-on-year decline.
The oil and gas exploration company posted net sales of Rs44.7 billion during 2QFY26, up 8 percent year-on-year but down 1 percent quarter-on-quarter. This took total sales for 1HFY26 to Rs90.1 billion, representing a 4 percent year-on-year increase.
Royalty expense surged to Rs10.6 billion, marking a 33 percent year-on-year increase. Royalty as a proportion of net sales stood at 24 percent, largely stable compared to 25 percent in the preceding quarter. Operating expenditures (OPEX) for the quarter came in at Rs12.0 billion, declining 20 percent year-on-year but rising sharply by 44 percent quarter-on-quarter. On a per-barrel-of-oil-equivalent basis, OPEX stood at USD3.86/BOE, significantly higher than the recent quarterly average and Topline’s expectation of USD2.76/BOE. The brokerage noted that such spikes in operating costs historically reflect one-off amortization charges, as seen in the current quarter, although further clarity from the company is awaited.
The company also booked exploration expenses of Rs1.9 billion, despite the absence of any major exploration activity or dry wells during the period.
Finance income declined 40 percent quarter-on-quarter to Rs1.0 billion, mainly due to a lower cash balance and foreign exchange losses following the appreciation of the Pakistani rupee from Rs281.32 per US dollar at end-September 2025 to Rs280.12 per US dollar at end-December 2025.
The effective tax rate (ETR) increased to 35 percent, compared to 25 percent in the same quarter last year and 32 percent in 1QFY26, further weighing on profitability. Meanwhile, Mari Energies announced an interim cash dividend of Rs8.3 per share for 2QFY26, translating into a 35 percent payout ratio for the first half of the fiscal year. The company had not declared any dividend in 1HFY25.
Copyright Business Recorder, 2026
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