Pakistan Oilfields (POL): 2QFY19 EPS Rs15.3, +103% YoY (+21% QoQ) (in line with expectations)
§ POL announced consolidated earnings of Rs4.3bn (EPS Rs15.3) in 2QFY19, broadly in line with street consensus.
§ During the outgoing quarter, POL’s revenues grew by 91% YoY, which was partly due to ‘low-base effect’ and partly due to higher oil prices & currency devaluation. To recall, POL booked revenue reversal in 2QFY18 on account of Tal block pricing (the case is still pending in the court).
§ Major revenue contribution in 2QFY19 came from higher Arab Light Crude prices, up 16% YoY to average US$69/bbl and 26% YoY gain in dollar against PKR.
§ Exploration charges fell by 83% YoY in 2QFY19, mainly on the back of lower geological & geophysical cost.
§ The company’s other income in 2QFY19 grew by 3x YoY. We attribute this to higher income on bank deposits on account of higher policy rate (+425bps in 2018 to 10%) and exchange gain on financial assets.
§ In 1HFY19, POL reported earnings of Rs7.9bn (EPS Rs27.8), led by higher oil prices and currency devaluation.
§ 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.
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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