OGDC_4QFY22 Result Review, (AKD Off the Analyst's Desk Sep 23, 2022)
AKD, Off the Analyst's Desk
OGDC: 4QFY22 Result Review
Oil & Gas Development Company Limited (OGDC) posted its earnings earlier today, wherein the company reported earnings of PkR133.8bn (EPS: PkR31.11) for FY22, lower than our estimates, however higher by 46.2%YoY. For the final quarter, the company posted earnings of PkR21.7bn (EPS: PkR5.05), lower by 49.6%QoQ and 13.4%YoY. Alongside the earnings, the company announced a higher-than-expected cash dividend of PkR2.50/sh (Full-year payout ratio 23%).
- Net sales clocked in at PkR95.2bn for 4QFY22, higher by 6.8%QoQ and 59.9%YoY. Macros played in the company’s favor, with crude oil prices higher by 20%QoQ and the exchange rate having depreciated by 11% during the period.
- Lower-than-expected earnings for the quarter can be attributed to higher operating expenses, which came in at PkR28.5bn for the quarter, higher by 70.7%QoQ and 40%YoY.
- Further pressure to the bottomline came in the form of higher-than-expected exploration expenses for the quarter, clocking in at PkR5.9bn, higher by 110.5%QoQ.
- Effective Tax Rate for the quarter was largely in line with expectations, coming in at 65.3% for 4QFY22, compared to our estimate of 64.7%. The higher tax rate was due to the imposition of Super Tax on the full-year earnings.
- We have a “Buy” rating on the stock, with a Jun’23 TP of PkR 122/sh on the stock, offering an upside of 65% from its last close. However, underlying market conditions may limit price discovery.
AKD Research
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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