Karachi, September 28, 2023 (PPI-OT): Oil and Gas Development Company Limited

Earnings: Oil and Gas Development Company Limited (OGDC) announced it 4QFY23 result. The Company reported 4QFY23 earnings of PKR 64.98bn (EPS PKR 15.11), up by +3.0xy/y compared to PKR 21.74bn (EPS PKR 5.05) in the similar period last year. On quarterly basis, profitability is up by +1%q/q. This brings total FY23 profitability to PKR 224.62bn (EPS PKR 52.23), up by +68%y/y.

Dividend/Payout: The Company announced cash dividend of PKR 2.75/share along with the result bringing total cash payout for FY23 to PKR 8.55/share.

Operating Performance: During the period under review, OGDC reported +10%y/y increase in revenue during 4QFY23 on the back of PKR depreciation despite lower oil and gas production and oil prices. Exploration cost increased by +38%y/y to PKR 8.13bn during 4QFY23 likely owing to higher prospecting expense and dry well cost. Operating expenses increased by +21%y/y to PKR 33.98bn during 4QFY23 compared to PKR 28.05bn in the same period last year. Other income jumped up significantly by +5.3xy/y during 4QFY23. Details on substantial rise in other income will be available through annual report and management briefing call.

On quarterly basis, earnings improved by +1%q/q mainly due to PKR depreciation and hefty other income despite higher tax rate, exploration cost and lower oil prices. Effective tax rate during 4QFY23 stood at 50.5% (3QFY23: 35.2%) compared to 65.3% in the same period last year bringing total effective tax rate for FY23 to 41.5% compared to 42.5% in the corresponding period last year.