OGDCL Posts Rs 133b Profit in Financial Year 2022

Oil and Gas Development Company (OGDC) has witnessed an increase of 46% in its profit which went up to Rs133.78 billion in the fiscal year ended June 30, 2022.

The sharp increase in oil prices and Pak rupee devaluation against the US dollar have played a key role in generating Oil and Gas Development Company Limited (OGDCL) net earnings of Rs 31.1 billion during the financial year 2022.

Pakistan’s largest oil & gas explorer Oil & Gas Development Company (OGDC) posted net earnings of Rs31.1 during FY22, up 46%YoY along with a final cash dividend of Rs2.5 (cumulative dividend Rs7.25).

Higher earnings mainly stem from a 40% rise in overall revenues led by a sharp increase in oil prices up 71% and Pak rupee devaluation against the US dollar by 10%.

Thus, revenue from crude oil which contributes more than 45% of overall revenues, is estimated to increase by more than 85%.

On the other hand, gas production is estimated to decline by 4%, and revenue from this segment is anticipated to increase by 12%.

The lower impact on gas revenue is due to the restrictive gas price mechanism versus crude oil and the delayed impact of oil prices on wellhead prices.

Similarly, higher interest rates and sharp erosion in local currency due to weakening macros led to a significant jump in finance & other income by 2.3x to Rs46.6bn.

On the flip side, the imposition of super tax in 4QFY22 led to a sharp rise in effective tax rate during the quarter which dragged FY22 earnings.

Going forward, we believe that the full impact of the Pak rupee devaluation will be visible in FY23 while Arab light crude oil price is estimated to remain almost flat.

All eyes will be on the gas sector circular debt as the fate of this mainly relies on a hike in gas prices which the government has already committed to IMF as this will lead to higher exploration and better payouts, Sherman Securities said.

According to the statement, the Board of Directors of Oil & Gas Development Company Limited (OGDCL) in its meeting held on 22nd September 2022 in Islamabad announced the financial results for the year ended June 30, 2022, of the fiscal year 2021-22.

Net sales revenue clocked at Rs.335.463 billion translating to a profit after tax of Rs. 133.783 billion, showing an increase of 56 per cent compared to a profit of Rs. 91.534 billion in the same period of last year and earnings per share of the company clocked at Rs. 31.11 from Rs. 21.28.

The Board of Directors announced the final cash dividend for the year 2021-2022 on the basis of accounts for the period ended June 30, 2022, @ 2.50 per share i.e. 25 per cent. This is an addition to interim dividends already paid @ Rs.4.75 per share i.e. 47.50 per cent to its shareholders.

The dividend will be paid to the shareholders whose names will appear in the Register of Members on Monday, October 17, 2022. The share transfer books of the company will be closed from Tuesday, October 18, 2022, to Tuesday, October 25, 2022.

During the period under review, the Company paid Rs. 98.737 billion on account of Taxation. The annual general meeting (AGM) of shareholders of the Company will be held on Tuesday, October 25, 2022, at 09.00 hours in Islamabad.

On the exploration and development side company recorded significant enhancement in seismic efforts and drilling activities.  The Board of Directors appreciated the efforts of the management in taking effective steps for the implementation of the company’s aggressive exploration program.