Topline Securities Limited - Pakistan Oilfields Ltd. (POL) Pakistan Oilfields (POL): 4QFY18 EPS Rs16.1, -12% YoY (+22% QoQ); DPS Rs 25/share; Bonus issue 20% (Result In line with expectations)

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Topline Securities Limited

EUR 10.00 For Business Accounts Only

Pakistan Oilfields (POL): 4QFY18 EPS Rs16.1, -12% YoY (+22% QoQ); DPS Rs 25/share; Bonus issue 20% (Result In line with expectations)

POL announced consolidated earnings of Rs3.8bn (EPS Rs16.1) in 4QFY18, broadly in-line with expectations. In addition to an interim dividend of Rs25/share (FY18 DPS Rs42.5), POL announced 20% bonus shares, better than estimates.
During the outgoing quarter, POL’s revenues were up 55% YoY thanks to 1) higher Arab Light oil prices, up 48% YoY, 2) increased hydrocarbon production and 3) currency devaluation.
Hydrocarbon production of the company recorded up to 5% YoY growth in 4QFY18 where oil volumes grew by 4.5% and gas volumes grew by 5%.
Financial charges were up by 4.3x YoY in 4QFY18. We attribute this to exchange losses on the back of currency devaluation.
Net earnings declined YoY mainly due to higher exploration charges. POL booked exploration expenses of Rs8.3/share during the outgoing quarter, up by a substantial 91% YoY. We attribute this to dry well cost.
We flag 1) inability to receive higher gas price incentive on TAL Block owing to WLO dispute (pending in the court), 2) lower than anticipated international oil prices, 2) significant exploration and development cost and 3) unexpected field shutdown as key risks for POL.

15/08/2018 5 EN

Underlying

Pakistan Oilfields Ltd.

Co. and its subsidiaries are principally engaged in the exploration, drilling, production and sale of crude oil and gas and other products.

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PK0023901017 Pakistan Stock Exchange Pakistan

Provider

Topline Securities Limited

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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