Owing to a notable decline in other expenses and a modest rise in revenue, Mari Petroleum’s profit rose up from 0.68% to Rs7.33 billion in the quarter ended December 31, 2020.
Mari Petroleum is an integrated exploration and production company, currently managing and operating Pakistan’s largest gas reservoir (in terms of remaining reserves) at Mari Gas Field, Daharki, Sindh. It is also registered as a blue-chip company at the Pakistan stock exchange and regularly wins awards and accolades from various independent bodies not only for its financial and operational performance and reporting but also for its management, HR, HSE, and CSR practices.
A notice sent to the Pakistan Stock Exchange by Mari on Thursday declared that the firm had reported a profit of Rs7.29 billion in the same quarter of 2019. Earnings per share were worth Rs54.98 during the October-December 2020 quarter compared to Rs54.61 in the corresponding period of 2019.
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The oil exploration firm also reported an interim cash dividend of Rs6 per share for the second quarter of fiscal year 2020-21.
Net sales stood at Rs18.8 billion in the quarter under review, which was 12.85% greater than Rs16.7 billion in the same quarter of previous fiscal year.
An analyst at Arif Habib Limited said that while oil prices declined 33% during the quarter against the same quarter of 2019, net sales noted an increase of 13% amid 27% year-on-year jump in oil production and 13% year-on-year growth in gas production.
Mari Petroleum enjoys the highest exploration success rate of 70%, much higher than industry average of 33% (national) and 25% (international). At the same time, it is the most cost-efficient E&P company in the Pakistan with the lowest operating cost of around 10% of gross sales.
The operating expenses of the E&P company rose from Rs3.2 billion during October-December 2019 to Rs4.1 billion during October-December 2020 i.e. 31%. Exploration and prospecting expenditure also went up from Rs1.5 billion to Rs1.8 billion, a 23% increase. The sudden increase in the exploration cost can be linked to higher prospecting expenditures, said the analyst.
However, the other expenses declined from Rs127.9 million during October-December 2019 to just Rs2.9 million in October-December 2020. According to the analyst, the reason for this massive plunge of 98% was the significant loss in a seismic unit in the prior year.
The finance income that stood at Rs1.38 billion in the last quarter of 2019 shrunk 41% to Rs812.7 million. The company booked effective taxation at 29% in the second quarter of fiscal year 2020-21 similar to the same period of last year said the analyst.
For the first half ended December 31, 2020, Mari recorded a net profit of Rs16.4 billion translating into EPS of Rs122.94 as against profit of Rs14.74 billion and EPS of Rs110.55 in the corresponding period of the previous year.
In the latest block bidding round, Mari Petroleum was awarded provisionally awarded 4 new exploration blocks by General of Petroleum Concessions (DGPC).
Apart from the exploration activities, Mari is also celebrated for playing a pivotal role in ensuring food security of Pakistan as more than 90% urea production in the company is based on MPCL supplied gas. The company also supplies gas for power generation and domestic consumers.