MARI Result Review- Robust Earnings and Payouts, (AKD Off the Analyst's Desk Jan 29, 2024)
MARI Result Review- Robust Earnings and Payouts
Mari Petroleum Company Limited (MARI) reported its 2QFY24 earnings earlier today, wherein the company posted Profit After Tax (PAT) of PkR18.36bn (EPS: PkR137.64) for the quarter, changing by –4%/+65%YoY — slightly above our estimates. The modest quarterly decline is primarily due to lower gas production (down 1.0% QoQ) alongside lower instances of financial income during the period. Along with the result, company also announced an interim payout of PkR98.0/sh for the 1HFY24A.
- Net sales stood at PkR45.5bn for the second quarter (up 56%YoY). The said increase on an annual basis is majorly due to: i) higher hydrocarbon production (up 22%YoY), and, ii) Higher avg. PkR/USD parity (up 27%YoY) alongside elevated well-head prices.
- Opex stood at PkR7.0bn (up 91%YoY), higher due to costs associated with new projects including the GTH capacity and EPF facility in Bannu West.
- On the development and exploration front, exploration expenses fell to PkR1.46bn (down 66%YoY) during the period. Furthermore, finance income stood at PkR1.6bn (-36%QoQ/+35%YoY), with yearly increases driven by higher cash balances and higher average interest rates during the period.
- On the taxation front, effective tax clocked in at 39.5% during the quarter (vs. 40.5%/33.8% during 1QFY24/2QFY23).
- MARI remains our top pick from the sector, with a Dce’24 target price of PkR3,000/sh on the stock, offering upside potential of 28% over the last close. In addition to this, the stock provides an FY24F dividend yield of 9.0%. MARI is currently trading at a FY24/FY25 P/E of 4.17/3.80, compared to the long-run averages of 7.5x
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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