Islamabad: PPL, a prominent player in Pakistan’s oil and gas sector, reported a significant increase in cash collections during the fourth quarter of fiscal year 2024, achieving a remarkable 113% collection rate. This performance marks the first time since the fourth quarter of fiscal year 2020 that the company has surpassed the 100% collection threshold, dramatically improving from the 44% recorded in the same quarter of the previous year.

According to AKD Securities Limited, “PPL’s surge in collections can largely be attributed to the rationalization of gas prices, which saw three adjustments in January 2023, November 2023, and February 2024. Additionally, the company’s annual collection rate for fiscal year 2024 improved to 81%, up from 53% in the previous year. Notably, revenue recovery from SNGPL increased to 83% in FY24, up from 34% in FY23, while SSGC’s recovery rate also climbed to 46% from 12% in the same period.”

The substantial increase in receivable collections has fortified PPL’s financial position, enabling it to intensify efforts in oil and gas exploration and thus bolster its reserve replacement ratio. This enhancement is vital for the sustained production and long-term sustainability of the company. In response to these positive developments, AKD Securities has reiterated its ‘BUY’ recommendation for PPL, with a target price of PkR155 per share and an anticipated dividend yield of 11% for FY25E.