FY12 results of the countrys third largest exploration and production company received a warm welcome when Attock Group revealed the financial performances of its E&P wing along with other member companies, yesterday.
The E&P player was seen to benefit from the higher oil prices internationally through most part of the fiscal year FY12 as evident from the rise of 18 to 19 percent year on year in average price of Arab Light.
The oil prices were the only contributor to the 15 percent augmentation in the top line during FY12 versus FY11 as volumes chose to be flattish during the said period due to delays and slippages. However, some improvement from the companys non-operating block Tal managed to lift some hopes, and according to the analyst at Top Line Securities, this pushed up oil and gas production by approximately three percent and two percent respectively.
Compared to the stupendous growth in the earnings of the peer E&P companies, the bottom line of Pakistan Oilfields Limited during FY12 grew by a slower 10 percent versus that of FY11. Besides the sales revenue, the expansion is attributable to little or no exploration write-offs.
Also, the earnings were steady during FY12 due to stable cash position and higher other income, primarily in form of higher dividends announced by the associate companies of Attock Group.
However, what deterred earnings from expanding on a faster pace during the period under review is the high amortisation of development and decommissioning cost particularly at Domial. The gross and net margin also dipped by 200 basis points each.
Furthermore, the earnings got diluted due to relatively higher taxation. And a fall in the oil prices unmistakably during the 4QFY12.
The dividend announcement however, beat the street as the company declared a final cash dividend of Rs35 per share making the total dividend Rs52.5 for FY12. Going forward, with ambitious exploration and drilling activities planned during FY13, the company has an immense potential of an up tick in production as well as reserves. Production particularly from Makori East - I is expected to impact POLs production positively during FY13.
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PAKISTAN OILFIELDS LIMITED
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Rs (mn) FY12 FY11 chg
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Net sales 28,624 24,951 15%
Amortization cost 1,807 1,122 61%
Gross profit 17,507 15,628 12%
Gross margin 61% 63% -
Exploration cost 594 1,075 -45%
Finance cost 685 224 206%
Other operating income 2,547 1,809 41%
Profit for the period 11,853 10,815 10%
Net margin 41% 43% -
EPS (Rs/share) 50.11 45.72 10%
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Source KSE Notice