Karachi: Pakistan Oilfields Ltd (POL) reported a significant decline in its earnings for the third quarter of fiscal year 2025, with Profit after Tax (PAT) dropping 47% year-over-year to PkR6.6 billion, or PkR23.3 per share. The decline aligns with market expectations and is attributed to the absence of a previous tax credit related to depletion allowance and lower income compared to the same period last year.

Net revenues saw an 11% decrease year-over-year, totaling approximately PkR14.6 billion for the quarter. The decline is primarily due to lower oil prices, which fell 7% compared to the previous year, and a reduction in hydrocarbon production. Oil and gas output is reported at 4.5 thousand barrels per day and 53 million cubic feet per day, down 8% and 18% year-over-year, respectively, according to Pakistan Petroleum Information Service (PPIS) data.

Exploration expenses surged to PkR1.4 billion, a 4.5-fold increase from the same period last year. This rise is likely due to geological and geophysical activities in the North Dhurnal and D.G. Khan blocks.

Other income decreased by 28% year-over-year, settling at PkR2.8 billion. This decline is attributed to lower cash and short-term investment balances, coupled with declining yields on investments. The company’s cash and short-term investments stood at PkR102 billion, down 11% from the previous year, according to March 2025 accounts.

Operating charges increased by 25% year-over-year to PkR3.2 billion, possibly due to higher administrative costs. The company’s effective tax rate for the quarter was 30%, compared to 10% and 37% in the same period last year and the previous quarter, respectively.

AKD Securities Limited has maintained a 'BUY' recommendation on Pakistan Oilfields Ltd, with a December 2025 target price of PkR750 per share and a dividend yield of 14.5% for the fiscal year 2025.