Karachi October 28,2021: OGDC is scheduled to announce its 1QFY22 results on October 28, 2021. We expect the company to post an EPS of PKR 7.1, compared to an EPS of PKR 5.45 in SPLY, depicting a growth of 29% YoY. Along with the result, we also expect the company to announce an interim dividend of PKR 2.5/share says Aftab Awan, ACCA Research Analyst at Akseer Research.
The company’s topline is likely to increase 24% YoY to PKR 73.5bn compared to PKR 59.5bn in corresponding period last year. Lower hydrocarbon production during the quarter is expected to restrict the topline growth despite 68% YoY (in PKR terms) surge in oil prices.
A L S O || R E A D
Pakistan Cables sales increased by 140 percent in 1QFY22
OGDC’s gas production witnessed decline of 6% YoY during the quarter where the major reduction came from Qadirpur, KPD and Tal block. Similarly, oil production witnessed a 3% YoY decline due to lower flows from Nashpa (ATA in August), Adhi, KPD and Tal block.
Exploration expenditure is expected to increase by 61% YoY to PKR 4.7bn, as against PKR 2.9bn in the SPLY. On the contrary, other income is likely to come at PKR 5.2bn, up 59% YoY mainly on account of exchange gains booked during 1QFY22.
On sequential basis, net earnings are expected to increase by 21% QoQ, primarily due to higher international crude oil prices and PKR devaluation.
Aftab has also said that its Jun-22 price target (PT) for OGDC is PKR 181/share that provides an upside of 117% along with a dividend yield of 12%, OGDC is also trading at FY22 PE and PBV of 2.8x and 0.4x, respectively.
Akseer Oil and Gas Development Company Limited (OGDC) has been computed using reserve based Free cash flow to equity (FCFE) method. We have used a risk free rate of 11%, beta of 1.0 & market risk premium of 6% to arrive at cost of equity of 17%.
