EUR 9.10 For Business Accounts Only

OGDC_ PPL_ MARI & POL 2QFY24E Previews, (AKD Daily Jan 25, 2024)

OGDC_ PPL_ MARI & POL 2QFY24E Previews,

 

OGDC to report earnings of PkR10.51/sh for 2QFY24E: Oil & Gas Development Company Limited (OGDC) is scheduled to release its 2QFY24E earnings sometime in February, where we expect the company to post NPAT of PkR45.2bn (EPS: PkR10.51), changing by -8%/+8% on a QoQ/YoY basis. The said decline in PAT on a quarterly basis is due to lower FX gains (PkR/US$ parity: down 3%QoQ) and hydrocarbon production. Gas production was (down 13% QoQ) was influenced by subdued offtakes from Uch, Qadirpur and KPD fields during the period. However, the addition from Bettani (+12.5 mmcfd YoY) resulted in some respite during the period. With regards to oil, production experienced a modest rebound by over 2% QoQ, reaching 33.4k bpd, however, lower average oil prices negated the said effects. In summary, we expect 1HFY24E earnings to end at PkR94.0bn (EPS: 21.87/sh), largely unchanged on a YoY basis. Alongside the earnings, we expect the company to announce a cash dividend of PkR2.0/sh, taking total dividends for the first half to PkR3.60/sh (vs. 4.0/sh SPLY).

 

PPL – Earnings expected at PkR9.41/sh for 2QFY24E: We expect Pakistan Petroleum Limited (PPL) to post NPAT of PkR25.6bn (EPS: PkR9.41) for 2QFY24E, down 14%QoQ although up 15%YoY. The decline in quarterly earnings is largely owed to lower hydrocarbon production, with both oil and gas falling by 1.0%/13% during the outgoing period. Kandhkot experienced significant declines, with average gas production dropping by 53%QoQ, standing at 60MMCFD. Sui gas field and Adhi oil field also contributed to the challenges, witnessing declines of 8% and 4.5% QoQ, respectively. Additionally, the company incurred a dry well during the period aswell, specifically Murad X-1 in the Kalat block during Nov’23. This is expected to lead to higher exploration expenses during the quarter, clocking in at PkR3.0bn. Overall, the company is set to post its highest half –yearly topline, which is expected to clock in at PkR55.3 (up 14%YoY). Alongside the earnings, we expect the company to announce a interim cash dividend of PkR1.0/sh during 1HFY24E (vs. 1.0/sh SPLY).

 

MARI – Earnings to clock in at PkR121.8/sh in 2QFY24E: Mari Petroleum Company Limited (MARI) is scheduled to post 2QFY24E earnings on Monday, wherein we expect the company to report PAT of PkR16.2bn for the quarter (EPS: PkR121.8), down by 15%/46% on QoQ/YoY basis. This takes half year earnings to end at PkR265/sh (up 48%YoY) vs. PkR179/sh in 1HFY23A. The said decline in bottom-line on a quarterly basis is largely due to lower gas production (down 1.0% QoQ) alongside possibilities of higher exploration expenses (drilling works in Waziristan, Block-28 and Mari blocks) during the period. Further, Mari field encountered a one-off decline in gas production in Oct’23 as fertilizer customers opted to reduce offtakes during the month due to maintenance turnarounds. Alongside the earnings, we expect the company to announce cash dividend of PkR90/sh vs. payout of PkR89/sh in SPLY.

 

 

POL – 2QFY24E earnings expected at PkR26.3/sh: Pakistan Oilfields Limited (POL)’s board of directors are scheduled to meet sometime in February, where we expect the company to post earnings of PkR7.45bn (EPS: PkR26.3) for 2QFY24E, depicting a decline of 23%QoQ while up 26%YoY. The said decline in earnings is majorly due to exchange losses on foreign deposits alongside lower oil production (down 2% QoQ). We expect company to book net exchange losses to the tune of PkR2.2bn on its FX deposits during the period. In summary, total other income is expected to reach PkR1.38bn, down 72%YoY. To note, company’s other income contributed to ~54% of total PBT during FY23. Alongside the earnings, we expect the company to announce a half-yearly cash dividend of PkR45/sh (vs. PkR20/sh SPLY). Overall, we have a Buy rating on the stock, with a Dec’24 TP of PkR580/sh, alongside dividend yields of ~21/20% for the FY24/FY25, respectively.