Oil and Gas Development Company Ltd (OGDC) announces Q3 financial results

Insight Research has just released an update on Oil and Gas Development Company Limited’s recent quarterly results. Here are the important points from the OGDC earnings announcement:

Performance Overview

In the third quarter of fiscal year 2024 (3QFY24), Oil and Gas Development Company Limited (OGDC PA) reported a Profit After Tax (PAT) of approximately PKR47.8 billion, translating to an Earnings Per Share (EPS) of PKR11.1. This represents a 26% decrease year-over-year (YoY) from PKR64.6 billion (EPS: PKR15.0) in the same period last year. The decline was primarily driven by lower other income and muted foreign exchange (FX) gain. However, the result surpassed expectations, largely due to lower operating costs and higher other income than anticipated.

Revenue Growth

Despite challenges, OGDC recorded a 6% YoY increase in revenue for 3QFY24, attributed to PKR devaluation and increased oil production. However, revenue declined by 2% sequentially (quarter-over-quarter, QoQ) due to lower oil prices.

Cost Analysis

Operating costs surged by 32% YoY to approximately PKR26.8 billion in 3QFY24. However, there was an 18% QoQ decrease in operating costs, reflecting operational efficiencies during the quarter.

Other Income Fluctuations

OGDC experienced a notable 54% YoY decline in other income, totaling around PKR17.3 billion, mainly due to the absence of FX gains recorded in the same period last year. Nevertheless, other income increased by 57% QoQ, showing a positive trend.

Exploration Expenses and Taxation

Exploration expenses decreased by 18% YoY in 3QFY24, likely attributed to no dry well expenses during this period. The taxation charge for the quarter stood at 41.2%, compared to 35.2% YoY and -2.9% QoQ. It’s noteworthy that OGDC recorded a tax reversal in 2QFY24 due to a one-off tax adjustment of depletion allowance.

Dividend Announcement

In addition to the financial results, OGDC announced a cash dividend of PKR2.0 per share for 3QFY24, bringing the total cash dividend for the first nine months of fiscal year 2024 (9MFY24) to PKR6.1 per share, compared to PKR5.8 per share in the same period last year.

OGDC – PKRmn	3QFY24	3QFY23	2QFY24	YoY	QoQ	9MFY24	9MFY23	YoY
Net Sales	112,789	105,913	115,234	6%	-2%	348,164	309,148	13%
Royalty	12,975	12,654	13,798	3%	-6%	40,426	36,129	12%
Operating Costs	26,799	20,338	32,550	32%	-18%	87,244	59,629	46%
Transportation Charges	654	590	674	11%	-3%	1,937	1,345	44%
Gross Profit	72,361	72,330	68,212	0%	6%	218,557	212,044	3%
Other Income	17,271	37,446	11,018	-54%	57%	44,540	65,184	-32%
Exploration Expenses	3,475	4,246	2,395	-18%	45%	8,501	10,895	-22%
Admin Expenses	1,915	1,600	2,432	20%	-21%	6,546	3,865	69%
Finance Cost	1,821	1,201	1,750	52%	4%	5,253	3,485	51%
Profit Before Tax (PBT)	81,286	99,772	72,141	-19%	13%	239,601	252,621	-5%
Taxation	33,478	35,145	-2,117	-5%	N/A	68,498	92,981	-26%
Profit After Tax (PAT)	47,808	64,627	74,258	-26%	-36%	171,104	159,640	7%
Earnings Per Share (EPS)	11.1	15.0	17.3	–	–	39.8	37.1	–
Dividend Per Share (DPS)	2.0	1.8	2.5	–	–	6.1	5.8	–

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Disclaimer
The information in this article is based on research by Insight Research. All efforts have been made to ensure the data represented in this article is as per the research report. This report should not be considered investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.