The Oil and Gas Development Company Limited’s (OGDCL) after-tax profit for the first quarter of this fiscal year dropped 15.7 per cent to Rs28.3 billion, translating into earnings per share (eps) of Rs6.58.
The company’s profit was Rs33.6bn (eps: Rs7.81) in the same quarter of last year. Its Board recommended final cash dividend at Rs2.50 per share.
Analyst Muhammad Affan Ismail at BMA Capital Management believed that the results were below consensus estimates, possibly due to higher-than-estimated exploration expenditures and an above-expected effective tax rate of 32pc.
Net sales rose by 3.4pc to Rs64.4bn, compared to Rs62.4bn in 1QFY14. However, a 28.2pc surge in operating costs resulted in lower gross profit, which the analysts thought was due to higher amortisation/impairment costs on development and production assets following reserve evaluation.
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