OGDCL profits sink 30 percent

KARACHI: Pakistan’s largest exploration and production company, Oil and Gas Development Company (OGDC) profits sank 30 percent to Rs87.249 billion in FY15 from Rs123.914 billion in FY14.
“The decline in profitability came in line with the market expectations because of 43 percent decline in Arab Light Crude oil prices, which is the benchmark for local E&P companies,” Nabeel Khurshid at Topline Securities said.
As per the company, in FY15, OGDC’s average net realised price of crude oil declined by 28 percent to $63.29 per barrel. Resultantly, the net turnover dropped to Rs210.624 billion in FY15 as compared to Rs257.014 billion in FY14.
Exploration cost of Rs11.6 billion booked during FY15 against Rs8.7 billion in FY14 also dented OGDC’s earnings. “Surge in exploration cost was on account of nine percent increase in the cost of dry and abandoned wells to Rs4.8 billion and 59 percent increase in prospecting expenditure to Rs6.7 billion, which resulted from enhanced geophysical survey combined with higher operating expenses,” Khurshid added.
On the other hand, OGDC also recorded substantial increase of Rs1.04 billion in the profit from its associate, Mari Petroleum Company (MARI).
Moreover, during FY15, the company’s exploratory activities resulted in four new oil and gas discoveries. These were Soghri-1 & Jand-1 in Attock, Punjab province and Jarwar-1 & Palli Deep-1 in Tando Allah Yar, Sindh province.
Energy experts said that OGDC enjoys strong fundamentals on the basis of its drilling plans.
OGDC had already made discoveries and its future plans are quite realistic and progressive, which would offset the impact of depleting reserves.
The E&P company also announced a final cash dividend of Rs1.5 per share, which is in addition to the interim dividend of Rs6.25 already paid to the shareholders.

Faysal Bank profits doubled
Faysal Bank Limited net profits more than doubled to Rs687.998 billion for the quarter ended June 30, 2015 as compared to Rs307.636 million a year ago.
The earnings per share (EPS) clocked in at 57 paisas in June 2015 as compared to 26 paisas last year.
“Earnings came slightly better-than-expectations on improving efficiency due to lower operating costs,” Amreen Soorani at JS Global Capital said.
The net interest income in the quarter under review stood at Rs2.706 billion, up from Rs2.526 billion last year.
Total non-markup surged by 31 percent to Rs1.483 billion as against Rs1.133 billion last year.
For the half-year ended June 30, 2015, Faysal Bank posted net profit of Rs2.567 billion, translating into EPS of Rs2.14.
"Key drivers of robust earnings included 64 percent jump in non-interest income, 33 percent decline in provisions and 16 percent decline in operating expenses. Cost to income for Faysal Bank for the half-year clocked in at 51 percent against 74 percent last year, with major contribution from non-core income."
Analysts said that the banking sector has a super outlook given clean books and ample availability of liquidity to cater to the genuine demand, which is quite likely because of the country's positive growth outlook.