Pakistan Oilfield Ltd (PSX:POL) is trading at a very low Price to Earning Ratio (PE) of less than4 and a low Price to Book (PBV) of close to 2. POL pays a cash dividend twice a year and currently has a high dividend yield of 17%.
In a structured portfolio a weight of 2.5% is recommended for POL.
The latest annual EPS in 2022 was over Rs. 90, which is almost double compared to any earning per share in recent years. On a trailing twelve month basis, EPS remains high.
Higher profitability in 2022, and in subsequent two quarters is due to higher oil prices and a declining rupee. Higher other income due to higher interest rates also boosted the EPS of POL.
POL holds investments in National Refinery (NRL, see note) and Attock Petroleum (APL). Both companies are profitable and pay cash dividends.
POL earns substantial income from interest on its substantial cash balance, dividends etc. At times this other income gets boosted on account of 'Exchange gain / (loss) on financial assets' or reduced. In 2022 'other income' was around 30% of profit before taxation (2021: 5%).
POL has no debt. The 'financial cost' in the income statement usually on some other account. For example in 2022 the 'financial cost' Rs 5.5 billion was on account of 'Exchange gain / (loss) on financial assets'.
Since 2019 there has been no change in POL paid up capital.
On the negative side POL production is declining year by year and no substantial discovery has taken place recently.
Attock Oil Company Limited owns 52.77% of Pakistan Oilfields Ltd.
Pakistan Oilfields Limited (PSX:POL) is incorporated in Pakistan as a public limited company. The Company is engaged in exploration, drilling and production of crude oil and gas in Pakistan. Its activities also include marketing of liquefied petroleum gas under the brand name POLGAS and transmission of petroleum.
POL is a subsidiary of The Attack Oil Company Limited, UK and its ultimate parent is Coral Holding Limited. Attock Oil Ltd holds 52.77% shares of POL.
Company Name: Pakistan Oilfields Limited
PSX Ticker: POL
Year End: June
Issued Ordinary Shares: 283.8 Million
Free Float: 45.75%
Market Cap of POL was Rs. 121.bn.
PSX Sector: OIL & GAS EXPLORATION
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