POL: Expect flattish earnings in 2Q results
- ​​We expect POL to post a 2QFY17 EPS of PkR9.85, flat QoQ and up 3%YoY. This will take 1HFY17 EPS to PkR19.65, up 27%YoY; we also expect an interim cash dividend of PkR17.5/sh. While we maintain our TP at PkR461/sh and Sell stance, we have adjusted our FY17F EPS with lower assumption of dry-well expense.
- Major expectations in 2Q estimate include: (i) big jump in production (Mardankhel & Adhi), and (ii) 10% higher oil prices, which will overcome drag from no dividend income (unlike 1Q) and normalized tax rate.
- We maintain our Sell stance on POL underpinned by high concentration risk and low reserve life. Nonetheless, upside risk to our estimates include higher oil prices and potential increase in production guidance of Mardankhel and Adhi, where recent development activity is likely to bear more fruit.
Co. and its subsidiaries are principally engaged in the exploration, drilling, production and sale of crude oil and gas and other products.
Intermarket Securities Limited (IMS) is a full service corporate brokerage firm based in Karachi, Pakistan. We service both domestic and international clients. IMS was ranked #2 Best Local Brokerage and #3 Best for Overall Country Research for 2016 by AsiaMoney.
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