POL_FY22 Analyst Briefing Takeaways,(AKD Off the Analyst's Desk Sep 22, 2022)
AKD, Off the Analyst's Desk
POL: FY22 Analyst Briefing Takeaways
Pakistan Oilfields Limited (POL) held its analyst briefing earlier today to discuss the FY22 results, the highlights of which are as follows:
- The company posted earnings of PkR 8,439mn (EPS: PkR29.73) for 4QFY22, higher by 128%YoY and 28%QoQ, aided by a 74%YoY/12%QoQ increase in topline and 258%YoY/134%QoQ growth in Other Income. For FY22, the company posted earnings of PkR25,935mn (EPS: PkR91.37), higher by 95%YoY.
- Regarding Makori East, management apprised that all the production enhancement work at the field as per current plans was concluded. To recall, Original Gas/Oil reserves at Makori East were revised up by 19.6bcf/1.1mn bbls between Dec’21 and Jun’22, as per PPIS data.
- In terms of the recently announced discovery at Tolanj West (expected flow of 34bpd of oil and 10.55MMCFD of gas), management has guided towards the production being connected within the next 2 months. Furthermore, planned testing at the field has already been completed.
- The company also apprised that the PP12 pricing issues in Tal Block, wherein the government is demanding a windfall, has led to activity slowing down at the fields. Furthermore, the company stated that Mamikhel South, which has 70-80% oil reserves, is being delayed due to the pricing issues and the company is in constant talks with the GoP to resolve the issue. The production line at Mamikhel South-2 has been completed and once the GoP pricing approval is granted, the well will start production .
- Regarding the prospects of the Solar panel business that the company is looking to enter, the management noted that the project was in its infancy and a pre-feasibility study is being conducted at the moment.
- We have a Buy rating on the stock, with a Jun’23 TP of PkR 570/sh, offering an upside of 62% from its last close. That said, underlying market conditions may potentially restrict price discovery in the near term.
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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