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Pakistan Oilfields (POL): 4QFY19 EPS Rs7.5, down 44% YoY, DPS Rs30 (Below expectations)

• Pakistan Oil Field (POL) announced its 4QFY19 results, where the company reported consolidated EPS of Rs7.5; down by 44% YoY due to loss from associate companies coupled with impairments on its investments.
• Unconsolidated earnings jumped by 62% YoY (in-line with our estimates) during 4QFY19 amidst increase in other income by 235% YoY and a decline in exploration expenses by 93% YoY.
• During the quarter, overall revenues of the core operations are up by 4% YoY due to dollar appreciation. However, hydrocarbon production of the company went down by 1% YoY in the said period.
• Exploration cost went down by 93% YoY due to lower prospecting expenditures and high base year effect, since last year during 4QFY18 the company incurred heavy expenses due to dry wells.
• Other income went up sharply to Rs3.2bn (+224% YoY) during 4QFY19  due to exchange gains on foreign currency deposits and higher returns on local deposits, in our view.
• 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, 3) significant exploration and development cost, and 4) unexpected field shutdown as key risks for the company.