Mari Petroleum’s profit inched up 0.68% to Rs7.33 billion in the quarter ended December 31, 2020 owing to a significant decline in other expenses and a modest rise in revenue.

According to a notice sent to the Pakistan Stock Exchange on Thursday, the oil exploration firm had reported a profit of Rs7.29 billion in the same quarter of 2019.

Accordingly, earnings per share amounted to Rs54.98 during the October-December 2020 quarter compared to Rs54.61 in the corresponding period of 2019.

Alongside the result, the company announced an interim cash dividend of Rs6 per share for the second quarter of fiscal year 2020-21.

Net sales were recorded 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.

Arif Habib Limited analyst Tahir Abbas said net sales recorded a growth of 13% amid 27% year-on-year jump in oil production and 13% year-on-year growth in gas production.

“However, oil prices declined 33% during the quarter against the same quarter of 2019,” he said.

Operating expenses of the company jumped from Rs3.2 billion during October-December 2019 to Rs4.1 billion during October-December 2020, a rise of 31%. Similarly, exploration and prospecting expenditure stood at Rs1.8 billion during the quarter, up 23% compared to Rs1.5 billion in the same quarter of 2019.

Abbas added that the spike in exploration cost was attributable to higher prospecting expenditures. Other expenses nosedived from Rs127.9 million during October-December 2019 to just Rs2.9 million in October-December 2020.

“Other expenses plunged by a massive 98% due to a noteworthy loss in a seismic unit in the prior year,” the analyst pointed out.

On the other hand, finance income contracted 41% to Rs812.7 million. Finance income had stood at Rs1.38 billion in the last quarter of 2019. The company booked effective taxation at 29% in the second quarter of fiscal year 2020-21 similar to the same period of last year, the analyst said.

During the day, Mari Petroleum’s share price fell Rs33.06 to close at Rs1,595.37 with 55,140 shares changing hands at the Pakistan Stock Exchange.

Published in The Express Tribune, February 19th, 2021.

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