OGDC | Oil & Gas Development Company Limited
Earning Release Q3-Mar 2024
OGDC announced earnings per share (EPS) of Rs. 11.12, compared to Rs. 15.03 in the same quarter last year.
A cash dividend of Rs. 2 per share was declared for this third-quarter.
On a 9-month basis, OGDC announced EPS of Rs. 39.78, compared to an EPS of Rs. 37.12 last year.
OGDC earned a profit after tax of Rs. 47,808 million for the third-quarter of 2024. Registering a decrease of 26.0% over last year. In terms of the components of profit and loss,
↗ Revenue increased by 6.5% in this quarter compared to last year,
= Gross profit remaining stagnant,
↘ EBIT decreased by 17.7%,
↘ Profit before tax decreased by 18.5%.
The tax rate for the quarter was 41.2%, which was higher by 6.0% compared to the same quarter last year. That eroded the bottom line further.
The gross profit margin for the quarter was 64.2%, which was lower than 4.1% in the same quarter last year.
To give a historic context to the earnings, please note that OGDC now, on a twelve-month trailing basis, has a profit after tax of Rs. 236,082 million. That has decreased by 6.7% over the twelve-month trailing PAT of the previous quarter. And on a twelve-month trailing basis, its EPS is Rs. 55, just up 1% over an average of last three quarters.
OGDC has paid a total of Rs. 8.85 as cash dividends in the last four quarters.
The performance of OGDC this quarter appears to be poor, primarily due to several factors. Firstly, compared to the same quarter last year, which boasted a higher gross margin of 68%, the current quarter's gross margin is notably lower. This decline is significant considering that the previous year's gross margin was the highest in the last six quarters. Despite this, there has been an improvement in the gross margin this quarter, albeit from a level of around less than 60% in the second quarter.
Additionally, a concerning trend in OGDC's profitability is the escalating financial charges, which have been increasing consistently each quarter. In the current quarter, these charges have surged to almost 22% of EBIT.
Moreover, the 'other income' of OGDC is comparatively lower than in previous quarters, particularly when compared to the same quarter last year, where it was notably higher.
Furthermore, the burden of higher taxation exacerbates the decline in profits, further contributing to the overall downturn in OGDC's performance.
