Oil & Gas Development (OGDC): 4QFY20 EPS at Rs3.82, down 50% YoY (In line with industry consensus)
- OGDC posted profit of Rs16.4bn (EPS: Rs3.82) during 4QFY20, down 50% YoY. The result was in line with industry expectations, however slightly above our expectations due to positive variance in Other Income.
- Company also declared a final cash dividend of Rs2.5 per share, taking full year DPS to Rs6.75 (Payout ratio: 29%).
- Company recorded net sales of Rs46bn in 4QFY20, down 29% QoQ due to fall in hydrocarbon production by 13-16% QoQ in addition to the decline in average oil prices (Arab light: US$27/barrel vs. US$54 in 3QFY20).
- Operating expenses during the quarter increased by 10% YoY and 28% QoQ despite decline in hydrocarbon production. We await management clarity on this account.
- Exploration cost increased by 53% QoQ as company recorded two dry wells during 4QFY20 (vs. one in 3QFY20).
- Other Income declined by 43% QoQ due to absence of heavy exchange gains.
- Full year FY20 earnings declined by 15% YoY due to (1) fall in sales by 6% YoY and (2) increase in exploration cost by 46% YoY.
Effective Tax Rate (ETR) clocked in at 17% during 4QFY20, with full year ETR averaging at 30% (FY19: 33%).
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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