The net profit of Oil and Gas Development Company Limited (OGDCL) declined by almost a half to Rs 9.2 billion during January-March quarter of 2016, the company revealed in its financial report to the Pakistan Stock Exchange on Tuesday.
The country’s largest publicly listed company reported an after-tax profit of Rs 9.1 billion or Rs 2.16 per share, down 54% from Rs 20.1 billion or Rs 4.69 per share during the same quarter of 2015.
The company also announced an interterm cash dividend of Re 0.5 per share.
The company’s share price increased by Rs 1.42 or 1.1% from the last day’s price (Rs 119.52) and closed at Rs 120.94 per share. A total of 10,047,500 shares of OGDC were traded at the close of market on Tuesday. The company was the volume leader among oil and gas exploration companies and seventh-highest overall.
“The result was below market expectations,” said Topline Securities.
“Earnings were short of our expectations mainly due to higher exploration charges, up 277% year-on-year. We attribute this increase to [the] company’s aggressive exploratory efforts,” it said.
However, Sherman Securities said that the decline in earnings also emanated from lower Arab light crude prices.
The local Exploration and Production giant, which has 3.9% weight in the benchmark KSE-100 Index and constitutes over 40% of the listed Oil & Gas Sector, reported Rs 36.5 billion in revenues during the first quarter of 2016, a decrease of 17.08% compared to Rs 44.04 billion it earned in sales during the corresponding period of 2015.
“OGDCL’s net sales declined by 17% year-on-year in the quarter, mainly on account of 41% year-on-year fall in [the] benchmark Arab Light Crude oil prices during the period,” said Topline Securities.
OGDCL is Pakistan’s largest petroleum exploration and production firm holding the largest portfolio of recoverable hydrocarbon reserves of Pakistan, at 36% of gas and 59% of oil, respectively, as of June 30, 2015.