POL_2QFY23 Result Review,(AKD Off the Analyst's Desk Feb 28, 2023)
Pakistan Oilfields Ltd (POL) reported its 2QFY23 earnings earlier today, wherein the company posted Profit After Tax (PAT) of PkR 5.95bn (EPS: PkR20.97) for the quarter, lower by 29%QoQ—lower than our estimate of PkR24.30/sh
- Net sales clocked in at PkR14.02bn for the period, down by 12% on a QoQ basis, majorly on the back of declining oil prices (down 15%QoQ) during the period. Overall, total hydrocarbon production remained flat QoQ, but is estimated to have declined by 12%YoY during 1HFY23 period.
- Exploration expenses clocked in at PkR0.95bn (down 117%QoQ), on account of no significant dry wells costs during the period. To recall, the company posted PkR4.35bn in dry well costs during the 1QFY23, on account of DGK-1 (DG Khan Block), taking total exploration expenses to PkR4.53bn for the period
- Other income for the period clocked in at PkR2.1bn, down 68%QoQ, possibly due to minimal exchange gains during the period. Finance costs also recorded a reversal of PkR486mn during the period, possibly due to exchange gains on ‘provision for decommissioning costs’
- Along with the result, company also announced an interim cash dividend of PkR20.0/ sh, well below our expectations of PkR45/sh. We have a Buy rating on the stock, with a Dec’23 TP of PkR600/sh, representing an upside potential of 36% from last close.
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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