Earnings of Pakistan Oilfields Limited (POL) dropped 37.8% to Rs3 billion in the second quarter of ongoing fiscal year on the back of a significant decline in net sales.

According to a notice sent to the Pakistan Stock Exchange on Wednesday, the oil and gas exploration and production company had posted a profit of Rs4.9 billion in the same quarter of 2019.

Accordingly, earnings per share of the company fell to Rs10.66 in Oct-Dec 2020 compared to Rs17.15 in the same period of previous fiscal year.

During the quarter ended Dec 31, 2020, net sales of the company dropped 19.8% to Rs9 billion. It had posted net sales of Rs11.2 billion in the same quarter of previous year.

According to a report of Topline Securities, net sales of POL declined due to a 6% year-on-year reduction in hydrocarbon production to 2.16 million barrels of oil equivalent (boe) in the second quarter of fiscal year 2020-21.

It pointed out that the price of Arab Light crude also fell 33% year-on-year to $43.7 per barrel during the quarter.

The company declared an interim cash dividend of Rs20 per share, in line with industry expectations and past practice, it said.

Operating cost of the company was recorded at Rs2.4 billion during the quarter under review, down 9% from Rs2.6 billion in the same period of previous fiscal year.

“Operating expenditures during the Oct-Dec quarter came in at $6.2 per boe, 5% lower than the last five quarters’ average of $6.5 per boe,” the report said. On the other hand, administration expenses ticked up 19.8% from Rs55.3 million during the Oct-Dec quarter of 2019 to Rs66.2 million in the quarter under review.

Exploration cost of the company fell 92% to Rs33.7 million in the Oct-Dec 2020 quarter.

Published in The Express Tribune, January 28th, 2021.

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