ISLAMABAD (ABC) — The state-owned Oil and Gas Development Company Limited (OGDCL) witnessed a profit jump of 30% to Rs123.2 billion during the half (1HFY24) of the ongoing fiscal year compared to the corresponding period of the previous fiscal year, reports WealthPK.
The rise in profit is attributable to the higher net sales and tax reversal in the second quarter. Resultantly, the earnings per share (EPS) increased to Rs28.67 during the period under review compared to Rs22.09 over the corresponding period of the last year.
| OGDC- Half-yearly Financials
(Rs in million) |
|||
| Particulars | 1HFY23 | 1HFY24 | Change
% |
| Net Sales | 203,236 | 235,375 | 16% |
| Gross Profit | 139,715 | 146,195 | 5% |
| Profit before tax | 152,848 | 158,315 | 4% |
| Net profit | 95,012 | 123,296 | 30% |
According to the profit or loss accounts filed with the Pakistan Stock Exchange, the company’s net sales surged by 16% to Rs235.3 billion during 1HFY24 compared to Rs203.2 billion recorded in 1HFY23. Moreover, the company recorded a gross profit of Rs146.1 billion in 1HFY24, against a gross profit of Rs139.7 billion during the same period last year.
OGDC in 2QFY24
In comparison to the second quarter of FY23, the revenues increased from Rs97.2 billion to Rs115.2 billion in 2QFY24, representing a change of 19%. The gross profit of Rs64.5 billion in 2QFY23 increased by 6% to Rs68.2 billion in 2QFY24.
| OGDC- Quarterly Financials
(Rs in million) |
|||
| Particulars | 2QFY23 | 2QFY24 | Change
% |
| Net Sales | 97,223 | 115,234 | 19% |
| Gross Profit | 64,509 | 68,212 | 6% |
| Profit before tax | 64,640 | 72,141 | 12% |
| Net profit | 41,709 | 74,258 | 78% |
The company reported a net profit of Rs41.7 billion and Rs74.2 billion, respectively in 2QFY23 and 2QFY24, representing a significant improvement in profitability, with a percentage change of 78%.
Six years at a glance (2018-2023)
During the years under consideration, the company’s top line only slid in 2020. However, its bottom line witnessed a decline in 2020 and 2021.
In 2019, the company’s revenue increased by 27% year-on-year (YoY) on account of higher oil and gas prices. Likewise, the bottom line expanded by 57% YoY, primarily due to a rise in the average exchange rate and an increase in other income. However, profitability in the year was partially impacted by the increase in amortization expenses.
The Fiscal Year 2020 was slow in general. Owing to the outbreak of Covid-19, the company witnessed a reduction in its topline and bottom line. Absence of exchange gains restricted other income growth and increased expenses, which in turn impacted the net profit.
| OGDC- Six Years Financial Highlights
(Rs in billion) |
||||||
| Particulars | 2017-18 | 2018-19 | 2019-20 | 2020-21 | 2021-22 | 2022-23 |
| Net Sales | 205.34 | 261.48 | 232.93 | 239.10 | 335.46 | 413.59 |
| Profit before taxation | 112.63 | 176.60 | 144.36 | 128.99 | 232.52 | 383.77 |
| Profit for the year | 78.74 | 118.39 | 100.94 | 91.53 | 133.78 | 224.62 |
After a dip in 2020, the top line of OGDC regained momentum in 2021 and grew by 2.6%. Along with the increase in crude oil and LPG production volumes, the rise in average prices of the natural gas was the driving factor for the revenue growth. However, the profitability during the year was affected by the higher operating expenses and lower interest income.
In FY22, the company’s revenues increased by 40% YoY due to a surge in oil prices and domestic currency depreciation. Apart from the rise in topline, the growth in OGDC’s bottom line was also due to the hefty exchange gains from the currency depreciation. The company’s profit before and after tax jumped by 80% and 46%, respectively, during the year.
The year 2023 experienced a staggering 68% YoY growth in its bottom line. The robust profit growth was the consequence of improved sales volume as well as price optimization strategies.
Company Profile
OGDC was established in 1961 as a public sector corporation before being converted to a public limited company in October 1997. Its primary operations involve exploration, drilling operation services, production, reservoir management, and engineering support.
The company remains steadfast in its commitment to harnessing innovative technologies and best practices to further enhance production capabilities, contribute to the nation’s energy needs, and fuel economic growth.
Targets for the fiscal Year 2023-24
During the ongoing Fiscal Year 2023-24, the company plans to drill 16 new wells, including nine exploratory, and six developmental. The net capital expenditure is estimated at Rs98.30 billion.