ISLAMABAD: The profitability of the country’s largest oil and gas producer, OGDCL, plummeted 28.5 per cent in the first half of the current fiscal year, apparently due to lower international crude prices.

After a meeting of its board of directors, the Oil and Gas Development Company Limited (OGDCL) announced that it registered net sales revenue of Rs86.186 billion during July-December FY16, a fall of 27.35pc (Rs32.5bn) compared to Rs118.64bn during the same period of last year.

The company said its after-tax profit stood at Rs34.205bn during the half, 28.5pc lower than last year’s Rs47.83bn. That translated into Rs7.95 earnings per share compared to Rs11.12 a year ago.

As a consequence, the board of directors declared second interim dividend of Rs1.20 per share against Rs2 per share last year, down 40pc.

The company said dividend would be paid to the shareholders whose names will appear in the register of members on March 14, 2016.

When contacted, Manager External Communications of the company Sikandar Ali Shaikh said the profits of all oil and gas companies were declining because of lower oil prices, OGDCL being no exception. He, however, expressed his inability to explain other fundamentals of the company, saying those questions should be referred to the company’s spokesman.

OGDCL spokesman Ahmad Hayat Luk was not available to explain if the company had been able to add its oil and gas output in first half of the year or the fall in revenue was also contributed by drop in hydrocarbon output along with lower oil prices.

The company in its statement said it paid Rs13.87bn in taxes to the government against Rs27bn it paid last year, almost 50pc down. The company, however, claimed that it recorded significant enhancement in seismic efforts and drilling activities but did not say if similar enhancement was recorded in production as well.

Pakistan State Oil: On the other hand, the board of management of PSO on Monday reported 57pc increase in its profit to Rs6.7bn in July-December 2015-16 compared with Rs4.3bn of the same period last year.

In a statement, the company said its market share stood at 55.5pc with 46.9pc share in white oil (Mogas, HSD, SKO, JP-1) and 69.6pc share in black oil (FO, LDO).

The company said its sale volume of motor gasoline grew by 26pc year-on-year, mainly due to decrease in prices of gasoline and subsequent increase in customer demand.

Additionally, HSD sales recorded an increase of 0.7pc in first half this year while 5.7pc growth was witnessed in JP-1 on account of increased off-take by PIA and international airlines. Furnace oil (FO) volumes declined by 4.3pc due to lower buying by IPPs, primarily due to shifting from FO to natural gas.

It said the increase in its revenue was mainly due to a growth in sales volume and margins of white oil products and decreased inventory losses. A significant drop in operating and finance costs by 18pc and 39pc, respectively, also contributed to increased profitability.

However, decrease in black oil margins owing to reduction of 48pc in the Opec price of crude oil per barrel had an adverse impact on profitability of the company. During the subject period, the cash flows and liquidity position of the company improved, though they remain critical as a consequence of outstanding receivables of Rs219bn (June 30, 2015: Rs 230bn) from the power sector, PIA and SNGPL against supplies of furnace oil, aviation fuels and liquefied natural gas (LNG), respectively.

Keeping into account the financial results, the board declared an interim cash dividend of Rs5 per share as compared to nil dividend in the same period last year.

Our equities correspondent adds

PAKISTAN PETROLEUM LTD: The company’s profit-after-tax declined by 46.61pc to Rs11.8bn (earnings per share Rs5.96) during the first half (July-December) of 2015-16 from Rs22.1bn (eps Rs11.23) in the same period last year.

The board paid interim cash dividend of Rs2.25 per share.

Net sales were down to Rs41.1bn from Rs57.8bn, due to a dip in Arab Light crude. Its oil production declined by 7pc to 13,500 barrels per day, while gas output increased by 7pc to 845mmcfd.

D.G. KHAN CEMENT: The company’s profit rose 20.59pc to Rs4.1bn (eps Rs9.30) during the first half (July-December) of 2015-16 as compared to the net earnings of Rs3.4bn (eps Rs7.80) in the same period last year.

During October-December, the profit increased by 37pc quarter-on-quarter to Rs2.4bn (eps Rs5.40).

The results were above market expectations.

In 1HFY16, gross profits grew 33pc, as a 4pc uptick in volume pushed revenues up by 8pc while sliding coal and power costs dragged the COGS by 4pc.

Published in Dawn, February 17th, 2016