OGDC Tax reversal propels bottom line , (AKD Off the Analyst's Desk Feb 27, 2024)
OGDC Tax reversal propels bottom line
Oil & Gas Development Company Ltd (OGDC) reported its 2QFY24 earnings earlier today, wherein the company posted its highest ever quarterly Profit After Tax (PAT) of PkR74.25bn (EPS: PkR17.27), higher by 52%/78% QoQ/YoY—significantly above our estimate of PkR10.51/ sh for the quarter.
- The notable improvement in bottom line is primarily due to taxation reversal, clocking in at PkR2.12bn during the quarter. The aforementioned reversal charge led to an effective tax rate of –ve 3% during the period, compared to normalized tax rate of 43%/35% during 1QFY24/2QFY23, respectively. Further clarity in this regard may be required on this abrupt dip in taxation, as the company presently holds deferred taxation liabilities of PkR86.2bn.
- On the topline front, revenues stood at PkR115.2bn, changing by –4%/+19% QoQ/ YoY, as oil and gas production changed by +2%/-13%QoQ during the period.
- On the opex front, expenses clocked in at PkR33.2bn during the quarter, higher by 17%/55% QoQ/YoY. This may possibly due completion of several development projects i.e. Khewari Processing Plant alongside discoveries at existing fields (KPD-TAY and Khewari Block).
- Exploration expenses clocked in at PkR2.39bn (down 14%QoQ), relatively stable amidst routine geophysical survey activities during the quarter.
- Along with the result, company also announced a cash dividend of PkR2.50/sh, taking total payout during the half year to PkR4.0/sh (vs. PkR4.0/sh during SPLY).
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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