OGDC’s half-year profit slips 6pc on high exploration cost

KARACHI: Oil & Gas Development Company Limited (OGDCL) on Wednesday said its profit, for the 6-month period ended December 31, 2019, dropped 6 percent year-on-year primarily owing to surging exploration cost and a fall in production amid easing international crude oil prices.

A statement said the company earned Rs53.184 billion in the first half of the current fiscal year compared to Rs56.756 billion posted in the same period last year.

As a result of lower profitability, the earning per share (EPS) for the period settled down at Rs12.37, vis-à-vis Rs13.20 in the corresponding period a year earlier.

The company however announced an interim cash dividend for the quarter ended December 31, 2019 at Rs1.75/share (17.5 percent), in addition to one already paid at Rs2.5/share (25 percent).

Analysts at brokerage Arif Habib Limited in a report said the company’s topline in 2QFY20 ticked up 3 percent year-on-year, clocking in at Rs67.237 billion as compared to Rs65.099 billion, during same period last year amid 14 percent year-on-year rupee devaluation against dollar.

However, they added that its oil and gas production fell 5 percent year-on-year each, tagged with 6 percent year-on-year tumble in crude oil prices.

On a cumulative basis, the energy giant’s net sales grew 5 percent year-on-year to Rs133.441 billion, the brokerage report said.

The exploration costs saw a massive surge of 156 percent year-on-year reaching Rs6.463 billion due to one dry well (Soghari X-03) and a higher prospecting expenditure in 2QFY20. With this, the total exploration costs during 1HFY20 settled at Rs10.425 million, up 133 percent year-on-year.

Company's other income in 2QFY20 settled at Rs5.082 billion, against Rs7.752 billion in same period last year, down 34 percent year-on-year, given absence of exchange gain on foreign currency accounts.

This took other income during 1HFY20 to Rs7.927 billion, a decline of 33 percent year-on-year.