Pakistan Petroleum Limited (PPL) Q3 earnings preview

AKD Research has just released an update on Pakistan Petroleum Limited’s previous quarter’s financial results. Here are the important points from their earnings preview:

Quarterly Performance Overview

For the third quarter of the fiscal year 2024 (3QFY24E), Pakistan Petroleum Limited (PPL) is anticipated to report a net profit after tax (NPAT) of PkR27.1 billion, translating to earnings per share (EPS) of PkR9.99. This represents a decline of 32% compared to the previous quarter and 17% year-on-year (YoY). The decrease in earnings is primarily due to a higher NPAT base in the previous quarter, which was influenced by a one-time tax adjustment.

Hydrocarbon Production

Gas output for the quarter is estimated to increase by 5% quarter-on-quarter (QoQ), reaching 558 million cubic feet per day (mmcfd). This growth is predominantly attributed to improved performance at Kandhkot and Qadirpur fields, which saw increases of 36mmcfd and 21.2mmcfd QoQ, respectively. However, the company faced challenges as it encountered a dry well, specifically Maraab X-1 in the Hala block during February 2024. This led to exploration expenses totaling PkR4.2 billion during the period.

Nine-Month Earnings Outlook

Despite the quarterly decline, PPL is expected to achieve its highest nine-month earnings, projected at PkR97 billion (EPS: PkR35.64), representing a substantial 19% YoY increase.

Income Statement Analysis

The breakdown of PPL’s income statement for 3QFY24E compared to the previous and year-ago quarters::

Item	3QFY24E (PKRmn)	2QFY24A (PKRmn)	QoQ Change	3QFY23A (PKRmn)	YoY Change	9MFY24E (PKRmn)	9MFY23A (PKRmn)	YoY Change
Net Sales	77,730	73,007	+6%	76,919	+1%	228,748	215,117	+6%
Royalty	12,169	11,282	+8%	11,960	+2%	35,928	34,966	+3%
Op. Exp.	12,782	12,644	+1%	12,774	0%	38,162	36,617	+4%
Exploration Exp.	2,780	3,308	-16%	4,080	-32%	7,723	13,616	-43%
Other Income	3,516	4,126	-15%	8,252	-57%	11,517	15,021	-23%
Other charges	4,127	4,513	-9%	4,426	-7%	12,881	12,469	+3%
Tax	18,911	176	+10633%	17,605	+7%	37,190	46,954	-21%
PAT	27,174	40,027	-32%	32,848	-17%	96,962	81,347	+19%
EPS-Adjusted	9.99	14.71	-32%	12.07	-17%	35.64	29.90	+19%
DPS-Adjusted	–	2.50	–	0.0	–	2.50	1.00	+150%

Conclusion

In conclusion, while Pakistan Petroleum Limited is expected to report a decline in quarterly earnings due to a higher base in the previous quarter, its nine-month earnings are projected to reach a record high. The company continues to navigate challenges in exploration while capitalizing on increased hydrocarbon production.

Disclaimer:

The information in this article is based on research by AKD 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.