Islamabad: Oil and Gas Development Company Ltd (OGDC) disclosed its financial results for the first quarter of fiscal year 2025 today, indicating a 16% decrease in profit after tax to PkR41.0 billion, primarily due to an unexpectedly high effective tax rate. Despite this decline, the company declared an interim cash dividend of PkR3.0 per share.

According to AKD Securities Limited, OGDC’s earnings were slightly below expectations, mainly because of a higher effective tax rate, which stood at 51% compared to 43% in the same period last year and 30% in the fourth quarter of FY24. This increased tax burden significantly impacted the company’s bottom line.

Net sales for the quarter decreased by 12% year-over-year to PkR106 billion, largely due to a drop in average oil prices to US$80.6 per barrel, a 10% decrease from last year, and a 5.2% appreciation of the domestic currency. Hydrocarbon production also declined, with oil output falling 2% to 32 thousand barrels per day and gas production down 6% to 719 million cubic feet per day.

Operating expenses decreased by 5% to PkR27 billion. However, exploration expenses rose by 46% to PkR3.8 billion, attributed to a dry well in the Tando Allahyar NE-1 block, where OGDC has a 95% ownership. Finance income increased significantly by 58% to PkR25.7 billion, boosted by substantial cash balances following the receipt of PkR82 billion from Power Holdings Ltd under overdue Tariff Differential Claims.

Further details on the financials, especially concerning the first-quarter reversal of provisioning for accrued interest on these claims, are anticipated in the upcoming detailed financial statements.