MARI - Highest ever quarterly bottom-line, (AKD Off the Analyst's Desk Oct 26, 2023)
AKD, Off the Analyst's Desk
MARI - Highest ever quarterly bottom-line
Mari Petroleum Company Limited (MARI) reported its 1QFY24 earnings earlier today, wherein the company posted Profit After Tax (PAT) of PkR19.14bn (EPS: PkR143.5) for the quarter, higher by 20%/51% QoQ/YoY — largely in-line with our estimates of EPS: PkR140.4/sh for the first quarter. This is the highest-ever bottom line in the company’s history, attributed to ever rising hydrocarbon production levels alongside revenue hedge linked to USD and international crude oil prices.
- Net sales stood at PkR48.2bn for the first quarter (up by 3%QoQ/51%YoY). The said increase is majorly due to: i) higher offtakes from the MARI field (up 4%QoQ/25%YoY), and, ii) Higher avg. PkR/USD parity (up 2.1%QoQ) alongside higher well-head prices
- Opex stood at PkR7.6bn (down 30%QoQ), lower due to higher base in the quarter before amidst commissioning of GTH capacity in 4QFY23. Overall, company’s OPEX/BOE remained robust during the quarter, estimated at US$1.80/BOE (vs. FY23 average: US$2.18/BOE)
- On the exploration front, exploration expenses fell to PkR1.8bn (down 72%QoQ) during the period. Furthermore, finance income continues to exhibit growth, driven by higher cash balances accumulated in the quarter before
- On the taxation front, effective tax clocked in at 40.5% during the quarter (vs. 37%/34% during 4QFY23/SPLY.
- MARI remains our top pick from the sector, with a June’24 target price of PkR2,750/sh on the stock, offering upside potential of 80% over the last close. In addition to this, the stock provides an FY24 dividend yield of 12.0%. MARI is currently trading at a FY24/FY25 P/E of 2.92/2.51, compared to the long-run averages of 9.70x
AKD Research
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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