Oil & Gas Development (OGDC): 1QFY19 EPS Rs6.2, +57% YoY (+22% QoQ); DPS Rs2.75/share (Above expectations)
- OGDC posted 1QFY19 earnings of Rs26.7bn (EPS Rs6.2), up 57% YoY, on account of higher 1) revenues, 2) other income, and 3) share from associates. The company also announced cash dividend of Rs2.75/share.
- The company’s net sales were up 41% YoY during the outgoing quarter thanks to 1) higher Arab Light oil prices, up 50% YoY, 2) PKR devaluation against the greenback, providing support to dollar linked revenues and 3) higher gas volume.
- However, oil production posted around 4% YoY decline in 1QFY19 largely on account of natural depletion in major fields like Qadirpur and Nashpa and some technical issues at various wells like Tando Alam and Kunnar amongst others.
- The company’s other income grew by 32% YoY mainly on the back of exchange gain of Rs855mn thanks to PKR devaluation against the greenback.
- OGDC booked profits from associates of Rs1bn, up 125% YoY due to improvement in profitability of Mari Petroleum (MARI).
- Exploration charges were up 29% higher than last year on the back of dry well cost, we believe.
- We flag 1) volatility in international oil prices, 2) lower than expected hydrocarbon production and 3) significant exploration and development cost as key risks for OGDC.
Oil and Gas Development Company is a petroleum exploration and production (E&P) company in the Pakistan oil and gas sector. Co.'s principal activity is to explore, develop, produce and sell oil and gas resources and related activities. Co. also manufactures Gas, Liquefied Petroleum Gas, Crude Oil, and Sulphur. Co.'s major fields contributing in the aforesaid production of crude oil include Nashpa, Kunnar/KPD, Pasakhi, Sinjhoro and Rajian and for gas include Qadirpur, Uch, KPD, Nashpa and Dakhni. Co. carries out exploration and development activities on its own as well as in joint ventures with other oil companies.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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