Pakistan Oilfields announces Rs17.5/share cash dividend

ISLAMABAD: Pakistan Oilfields Ltd (POL) announced 1HFY12 EPS of Rs26.1 showing an increase of 19% as compared to an EPS of Rs22.0 in the corresponding period last year. Cash dividend announcement of Rs17.5 per share also accompanied the result.

Increase in earnings is primarily on account of i) 25% increase in company’s topline due to higher international oil prices and improved production particularly from Tal block, ii) 51% increase in company’s other income to Rs1.6bn because of improved cash position along with higher dividend payout by the associate companies and iii) 56% reduction in exploration cost on account of curtailed exploration activity.

However, profitability growth was partially robed in due to increase in company’s amortization and decommissioning cost and higher effective tax rate, particularly in 2Q. Company booked amortization and decommissioning cost of Rs731mn in 2QFY12 as against Rs251mn and Rs293mn in 2QFY11 and 1QFY12, respectively. This rendering into 102% increase in the head to Rs1.0bn in 1HFY12 as against Rs506mn last year.

Similarly, company’s effective tax rate rose to 41% in 2Q as against normalized effective tax rate of 27-28%.

Thus, POL posted an EPS of Rs11.5 in 2Q, down 21% from preceding quarter.

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