PPL Reports 19% Profit Surge to Rs115.5bn in FY24

Pakistan Petroleum Limited (PPL) has recently reported a significant increase in its profit-after-tax (PAT) for the fiscal year ending June 30, 2024. The company’s PAT surged nearly 19%, reaching an impressive Rs115.48 billion, compared to Rs97.22 billion in the same period last year. This growth reflects PPL's strong operational performance and strategic management in a challenging economic environment.

According to the latest financial results shared with the Pakistan Stock Exchange (PSX), PPL's board of directors convened on September 20 to assess the company's financial and operational standing. They recommended a final cash dividend of Rs2.50 per share, which translates to a 25% return on ordinary shares. The earnings per share (EPS) for FY24 were recorded at Rs42.44, a notable increase from Rs35.73 in the previous fiscal year. However, it is important to note that these earnings fell short of market expectations, as highlighted by industry experts.

The growth in earnings can be attributed to a reduction in taxes paid during the fiscal year. On a consolidated basis, PPL's revenue from contracts with customers rose slightly to Rs291.24 billion in FY24, up from Rs288.05 billion in the same period last year, marking an increase of over 1%. Despite this revenue growth, the company experienced a decline in gross profit, which fell by 1% to Rs189.89 billion, down from Rs191.89 billion in the previous year. This decline was primarily due to higher operating expenses and royalties paid.

Interestingly, PPL managed to reduce its exportation and administrative expenses by 13% in FY24. However, the cost of finance saw an increase, rising to Rs1.65 billion from Rs1.55 billion in the previous year, reflecting a jump of over 6%. This increase in finance costs can be linked to the rising interest rates during the fiscal year. Additionally, PPL incurred Rs18.33 billion in other charges, which represents a 16% increase compared to the previous year. On a positive note, other income saw a slight uptick, reaching Rs17.5 billion in FY24, compared to Rs17.4 billion in the same period last year.

As a result of these financial dynamics, PPL posted a profit before tax of Rs160.3 billion in FY24, a decrease from Rs164.9 billion in FY23. The company paid Rs44.8 billion in taxes during FY24, a significant decline of 34% compared to Rs67.69 billion in the previous fiscal year. This reduction in tax liability has undoubtedly contributed to the overall increase in profitability.

PPL, which was established in Pakistan in 1950, has consistently focused on the exploration, prospecting, development, and production of oil and natural gas resources. The company’s ability to adapt to changing market conditions and manage its financial performance effectively is commendable. As PPL continues to navigate the complexities of the energy sector, its recent financial results indicate a resilient and forward-looking approach. Investors and stakeholders will be keenly observing how the company leverages its strengths to sustain growth and profitability in the future.