PPL & OGDC_3QFY18F Result Previews
PPL: 3QFY18F Result Preview
Pakistan Petroleum Limited (PPL) is scheduled to announce its 3QFY18 result tomorrow, i.e Apr 24’18. Earnings during the quarter are expected to rise 54.8%YoY to PkR11.29bn (EPS: PkR5.72) vs. PkR7.29bn (EPS: PkR3.70) on the back of 1) 24%YoY rise in intl. oil prices, 2) revised Sui gas prices linked to PP12, 3) slightly lower exploration expenses with only 1 JV operated dry well (Kacha Khel at Nashpa) and 4) other income coming in at PkR1.6bn vs. 0.6bn previously as the company records exchange gains during the quarter. Cumulatively, profitability for 9MFY18 is anticipated to clock-in at PkR33.31bn (EPS: PkR16.89), higher by 74.5%YoY led by 22% hike in intl. oil prices and a simultaneous rise in gas prices as well. On the volume side, combined oil and gas production is expected to remain flat at ~44MMBOE, while LPG is expected to witness an uptick of 18%YoY as production from Adhi increases along with commencement of production from Nashpa post developmental project. A sequential increase in earnings is largely attributable to lower exploration expense where the company booked 3 dry wells (suspended earlier) in the previous quarter.
OGDC: 3QFY18F Result Preview
We expect Oil & Gas development company (OGDC) to publish earnings of PkR22.30bn (EPS: PkR5.19) for 3QFY18 on Friday, Apr 27’18. This is 26.8%YoY higher from PkR17.59bn (EPS: PkR4.09) previously with top-line providing the major support as oil prices rise 24%YoY (with consequential impact on gas pricing as well ) despite a downtick in volumetric output by 6.2%YoY as older fields mature. Exploration expenses are expected to go up by 46%YoY as the company spends more in prospecting expenses (~PkR1.7bn) and records 2 dry holes during the period (Kacha khel and Ganjo Takkar). Lastly, higher other income (due to exchange gains) and share of profit from Mari petroleum are expected to provide further boost to the bottom-line. Along with the result, the company can declare an interim dividend of PkR2.5/sh. Cumulatively, 9MFY18 result is expected to be 23.9%YoY higher at PkR58.98bn (EPS: PkR13.71) by virtue of rising oil prices and a greater share of profit from the associate company. Lastly, we believe lower exploration expenses and 15% upward movement in intl. oil prices will keep the bottom-line inflated on QoQ basis (+13.4%).
AKD Research
Oil and Gas Development Company is a petroleum exploration and production (E&P) company in the Pakistan oil and gas sector. Co.'s principal activity is to explore, develop, produce and sell oil and gas resources and related activities. Co. also manufactures Gas, Liquefied Petroleum Gas, Crude Oil, and Sulphur. Co.'s major fields contributing in the aforesaid production of crude oil include Nashpa, Kunnar/KPD, Pasakhi, Sinjhoro and Rajian and for gas include Qadirpur, Uch, KPD, Nashpa and Dakhni. Co. carries out exploration and development activities on its own as well as in joint ventures with other oil companies.
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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