MARI_FY23 Result Review—Payout falls short of expectations (AKD Off the Analyst's Desk Aug 09, 2023)
Mari Petroleum Company Limited (MARI) reported its 4QFY23 earnings earlier today, wherein the company posted Profit After Tax (PAT) of PkR 15.84bn (EPS: PkR118.7) for the quarter, changing by –4%/183% QoQ/YoY — largely in-line with our estimates of EPS: PkR124.3/sh. For the full year, company posted PAT of PkR56.13bn (EPS: PkR420.7), up 70%YoY vs. PkR33.06bn (EPS: PkR247.8) during FY22. Along with the result, the company posted a final cash dividend of PkR58/sh, taking total payout for the year to PkR147/sh vs. PkR124/sh during FY22.
- Net sales stood at PkR46.9bn for the 4QFY23 (up by 24%QoQ), the highest quarterly topline in the company’s history. The said increase is majorly due i) higher offtakes from the MARI field (up 5%QoQ/16%YoY), ii) Higher avg. PkR/USD parity (up 10%QoQ) alongside higher well-head prices.
- On the non-operating front, MARI’s opex stood at PkR10.9bn (up 65%QoQ), possibly due to commissioning of GTH capacity during the period alongside year end remuneration/salary adjustments. On the exploration front, exploration expenses surged to PkR6.48bn (up 70%QoQ) during the period, possibly due to drilling/development activities in Mari Ghazij and Mari 122H wells, among other prospective activities.
- Finance income dropped considerably during the period, clocking in at PkR2.2bn (down 52%QoQ) amid absence of FX gains compared to the previous periods.
- On the taxation front, effective tax clocked in at 37% during the quarter (vs. 33%/55% during 3QFY23/SPLY. The surge is possibly due to super tax’s retrospective application.
- Dividend payout of PkR58/sh remained below expectations, possibly due to cash constraints on account of increased sales towards gas utility companies compared to last year. To note, MARI delivered approximately 125mmcfd towards SNGPL during June’23 amidst recent SGPC commissioning and unutilized offtakes of fertilizer customers. Overall, MARI remains our top pick from the sector, with a June’24 target price of PkR2700/ sh on the stock, providing an upside of 67% from last close
Mari Petroleum Company Limited is a Pakistan-based exploration and production company. The Company is engaged in managing and operating Pakistan's gas reservoir at Mari Field, District Ghotki, Sindh. Its segments include Exploration and Production; Mari Seismic Unit, and Mari Drilling Unit. The Exploration and Production segment includes various upstream business activities. The Mari Seismic Unit segment includes two-dimensional (2D)/three-dimensional (3D) seismic data acquisition. The Mari Drilling Unit segment includes onshore drilling services. In addition to Mari Gas Field, it holds development and production leases over Zarghun South and Sujawal Gas Fields, and has operatorship of eight exploration blocks (Ziarat, Harnai, Sukkur, Sujawal, Karak, Ghauri, Peshawar East and Khetwaro). Its other products include crude oil, condensate and liquefied petroleum gas (LPG). Its exploration and production assets are spread across Pakistan in all four provinces.
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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