Copyright brecorder
Pakistan Oilfields Limited (PSX: POL) announced a robust financial performance in the first quarter of FY26, with profits more than doubling year-on-year despite a drop in revenue. The company reported a profit after tax of Rs5.4 billion, translating to earnings per share of Rs19.13 — a 111 percent increase compared to Rs9.05 in the same period last year, though 27 percent lower quarter-on-quarter. The result reflected strong cost discipline, lower exploration outlays, and a softer effective tax rate, which helped offset the impact of weaker oil prices and subdued production volumes. Net sales fell 15 percent year-on-year to Rs13billion for POL in 1QFY26, primarily due to a 14 percent decline in average crude oil prices and lower hydrocarbon production. However, sales were up 7 percent quarter-on-quarter, supported by a modest recovery in volumes and an uptick in oil prices to an average of $71 per barrel compared to $69 in the previous quarter. Royalty expenses and operating costs both declined by 14–15 percent in line with the reduced sales base, keeping gross margins firm at around 65 percent — a reflection of efficient cost management and operational stability. A key earnings driver during the quarter was the sharp fall in exploration expenses, which dropped 85 percent to around a billion rupees compared to Rs7.7 billion a year ago. The same period last year had included dry well expenses, while this quarter’s activity remained limited to seismic work. Finance costs were down 44 percent year-on-year, while other income declined by 50 percent during 1QFY26 largely due to lower interest rates and an exchange loss from rupee appreciation. Overall, POL’s net margins improved to 41 percent from 17 percent a year earlier, underscoring the company’s ability to sustain profitability amid a softer external environment. While production constraints and lower global oil prices may weigh on revenue growth, cost optimization and reduced exploration risk are expected to support earnings momentum in the coming quarters.
