PPL’s yearly profit more than doubles

KARACHI: Profit of Pakistan Petroleum Limited (PPL) more than doubled to Rs34.699 billion for the year ended June 30, 2017 as increased wellhead price pushed up revenue, analysts said on Friday. 

PPL recorded earnings per share (EPS) of Rs17.60 for FY2017. The company’s net income was recorded at Rs16.065 billion with EPS of Rs8.15 for FY2016. The company also announced a final cash dividend of Rs6/share, which is in addition to dividend of Rs3/share already paid to the shareholders. 

“PPL’s earnings grew primarily on the back of higher gas sales revenue booked on account of increase in price of Sui gas field which was retrospectively applied from June 2015,” Nabeel Khursheed, an analyst at Topline Securities said. 

Higher production and rise in oil prices also added to the company’s revenue. PPL’s revenue increased 45.3 percent in FY2017 from Rs80.809 billion in FY2016.

Government recently revised Sui gas field price for PPL up 60 percent. “Sui field accounts for about 50 percent of PPL’s gas production,” Khursheed added. “We believe that about half of the earnings in the fourth quarter of FY17 came from this retrospective adjustment.” 

The company’s exploration cost decreased 26.8 percent to Rs11.755 billion during the last fiscal year due to lower seismic activities. Its other income stood at Rs4.87 billion in FY2017 as compared to Rs5.42 billion in FY2016.   

Analysts, however, said long-term volatility in international oil prices, delay in key projects and significant exploration and development cost pose key risks to PPL’s profitability.   PPL’s oil production grew 11 percent to 15,800 barrels per day due to additional flow from Nashpa and addition from Mardankhel field, which cumulatively added about 1,500 barrels per day of oil.

The company’s gas production grew four percent to around 826 million metric cubic feet per day (mmcfd), primarily on the back of addition from Shahdadpur and Mardankhel fields, which cumulatively added around 45mmcfd of gas.