OGDC profits decline 33% in 1HFY25

By Our Correspondent
March 01, 2025
The office of the Oil & Gas Development Company Limited (OGDCL) in Islamabad. — Facebook@ogdclofficial/File
The office of the Oil & Gas Development Company Limited (OGDCL) in Islamabad. — Facebook@ogdclofficial/File

KARACHI: Oil and Gas Development Company Limited (OGDC) announced its financial results for the first half of fiscal year 2025 (1HFY25), reporting a net profit of Rs82.46 billion (EPS: Rs19.17), reflecting a 33 per cent YoY decline.

In 2QFY25, the company posted earnings of Rs41.44 billion (EPS: Rs9.63), down 44 per cent YoY. Alongside the results, OGDC declared an interim cash dividend of Rs4.05 per share, bringing the total payout for 1HFY25 to Rs7.05 per share.

The company’s topline in 1HFY25 contracted by 12 percent YoY to Rs206.42 billion, primarily due to a decline in oil (-4.0 per cent) and gas (-8.0 per cent) production, a 12 per cent drop in oil prices, and the appreciation of the Pakistani rupee against the dollar.

In 2QFY25, net sales dropped 13 per cent YoY to Rs100.41 billion due to further reductions in oil (-6.0 per cent) and gas (-9.0 per cent) production, coupled with a 14 per cent YoY decrease in oil prices.

Exploration costs surged by 57 per cent YoY in 1HFY25 to Rs7.89 billion, while in 2QFY25, they rose by 68 per cent YoY, primarily due to the dry well (Kandewaro-1), compared to no dry wells in the same period last year.

Other income jumped 71 per cent YoY to Rs46.58 billion in 1HFY25, with a significant 89 per cent YoY increase in 2QFY25 to Rs3.20 billion, attributed to higher earnings from cash and cash equivalents. The company’s cash reserves stood at Rs263 billion as of December 2024, slightly lower than Rs265 billion in September 2024. Trade debts were recorded at Rs603 billion, marginally improving from Rs608 billion in the previous quarter.

OGDC recorded taxation of Rs31.27 billion in 2QFY25, compared to a tax reversal of Rs2.12 billion in 2QFY24, when the company had booked a reversal of the depletion allowance provision. Despite the earnings decline, the company’s payout ratio increased to 36.8 per cent in 1HFY25, more than double the 14.3 per cent in the same period last year, reflecting its commitment to shareholder returns, stated an analyst at Arif Habib Ltd.