KARACHI, Feb 24: The oil and gas exploration heavyweight — Oil & Gas Development Company
(OGDC)— announced profit after tax (PAT) amounting to Rs31.59 billion for the first half of the financial
year 2011.
The figure represented earning per share (eps) at Rs7.35 and was thought to be generally below analysts’
forecasts and showing marginal 11 per cent growth over PAT at Rs28.4 billion (eps: Rs6.62) earned in the
corresponding period of the previous year.
The board, which met on Thursday, also skipped an interim cash dividend against analysts’ expectations of
cash payout between Re1 to Rs1.50 per share. The company posted top line growth at 12 per cent to
Rs81.09 billion. AKD Securities analyst Naveed Vakil said that the growth was “in line with estimates and
was underpinned by higher development returns and marginal increase in gas volumes.” The OGDC
recorded a decline of 25 per cent year-on-year (YoY) in exploration expenditure due to a trailing schedule
and lower exploration write-offs. “The lower than expected growth in the bottom line is mainly attributable
to higher effective tax rate of 44.9 per cent recorded in 2QFY11,” commented analyst Umer Bin Ayaz.
The analyst said that the rise of 12 per cent in net revenues in 1HFY11 to Rs81.1 billion was “primarily on
the back of higher crude oil and gas wellhead prices in 1HFY11 (Arab Light prices averaging at $78.8 per
barrel, up 9 per cent YoY).”
Additionally, a 5 per cent YoY growth in hydrocarbon production mainly led by improved gas volumes also
supported the top line. Operating expenses for the company settled at Rs12.8 billion compared to Rs10.8
billion in the same period last year. Exploration expenses on the other hand, declined by 25 per cent YoY at
Rs3.5 billion. Other income decreased 22 per cent to Rs960 million mainly due to lower income on deposits.
