Karachi: Mari Energies Ltd has reported a decline in profitability for the first quarter of the fiscal year 2026. The company's net profit after tax (NPAT) fell by 19% year-on-year to PkR15.6 billion, or PkR13.03 per share, mainly due to increased royalty charges.

The company's net sales for the first quarter stood at PkR45.4 billion, showing no significant change from the previous year. Despite a 3% increase in net gas output, reaching an estimated 834 million cubic feet per day, the company faced challenges due to lower oil prices, which led to a reduction in well-head gas prices, keeping revenue growth stagnant.

Royalty charges for Mari Energies rose significantly to PkR11.3 billion, marking a 104% increase year-on-year. This surge was attributed to an additional 15% royalty on the well-head value of the Mari Development and Production lease, effective from November 2024, raising the effective royalty rate to 24.9% for the first quarter of FY26, compared to 12.2% during the same period last year.

Exploration expenses decreased by 26% to PkR2.2 billion from PkR3.0 billion in the same period last year. The company continued its exploration activities, including the drilling of the Mari Ghazij CF-A1 well and conducting gravity surveys in the Waziristan Exploration License area.

Finance income for Mari Energies fell sharply by 51% to PkR1.7 billion due to declining investment yields. As of September 2025, the company's cash and short-term investments were recorded at PkR55.6 billion, equating to PkR46 per share.

The effective tax rate for the quarter was 33.9%, slightly lower than 34% in the same period last year but higher than 32% in the fourth quarter of FY25. The company's stock is currently under review, according to AKD Securities Limited.