IGI Securities Limited - Flash Note.

Karachi -- January 27, 2021 (PPI-OT)

Pakistan Oilfields Limited: Lower production and oil prices drags 2QFY21 EPS down by 34%y/y to PKR 10.64; DPS PKR 20

Pakistan Oilfields Limited (POL) announced its financial results for 2QFY21 with earnings clocking in at PKR 3.02bn (EPS: PKR 10.64) as compared to PKR 4.56bn (EPS: PKR 16.07) in the same period last year, down by 34%Y/y. On sequential basis, earnings are down by 17%q/q. This bring total profitability for 1HFY21 to PKR 6.65bn (EPS PKR 12.78) down by 22%y/y.

The Company announced cash dividend of PKR 20/share along with the result.

We attribute this decline in earnings during 2QFY21 to a) 33%y/y drop in average oil prices despite 3%y/y PKR depreciation, b) 4%/9%y/y drop in oil/gas production and, c) 66%y/y drop in other income. On sequential basis earnings dropped on account of PKR appreciation and lower production whereas oil prices remained flat.

Net revenues declined by 23%y/y to PKR 8.84bn during 2QFY21...