PPL Profit Drops 15% in 1QFY26
Pakistan Petroleum Limited (PPL) reported a 15% year-on-year decline in profit for the first quarter of FY26, with earnings falling to Rs20.08 billion (EPS: Rs7.38), as lower hydrocarbon production weighed on performance, according to analysts at Topline Securities.
Net sales during the quarter reached Rs56.8 billion, down 14% from a year earlier but up 10% sequentially. The quarter-on-quarter improvement was driven by higher crude oil prices, which averaged US$71 per barrel in 1QFY26 compared with US$69 in the previous quarter. Sequentially, PPL’s oil and gas output rose 6% and 7%, respectively.
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Exploration expenses dropped sharply to Rs633 million, down 58% year-on-year and 84% quarter-on-quarter, mainly due to the absence of dry well costs. Operating expenses stood at Rs13.7 billion, 8% lower than a year ago, reflecting reduced hydrocarbon production amid field curtailments. The company’s operating cost per barrel of oil equivalent (BOE) was US$5.05, compared with US$7.84 in 1QFY25 and US$4.36 in 4QFY25.
Other income declined 68% year-on-year to Rs2 billion, mainly because of lower interest rates and foreign exchange losses linked to the rupee’s appreciation from Rs283.76 to Rs281.32 per US dollar during the quarter. The effective tax rate was 35%, compared to 39% in the same period last year and 32% in the preceding quarter.
Alongside the results, PPL announced a cash dividend of Rs2 per share for 1QFY26, translating into a payout ratio of 27%, up from 23% in 1QFY25.
Topline Securities reiterated its BUY recommendation on the stock, noting that PPL is currently trading at attractive valuations of 7.3x FY26E and 6.3x FY27F earnings multiples. The brokerage said it expects gradual recovery in output and earnings as production normalization and pricing reforms unfold over FY26.
