Karachi: Mari Energies (MARI) has announced a significant decline in its quarterly earnings, with figures dropping 18% quarter-on-quarter to Rs10.66 per share. Despite this, the company reported a 15% year-on-year growth in its earnings for the second quarter of fiscal year 2026. This takes the first half of the fiscal year's earnings to Rs23.89 per share, marking a 6% year-on-year decrease.
According to JS Global, the earnings were below expectations due to higher-than-anticipated operating and exploration costs. The company posted net sales of Rs44.7 billion, reflecting an 8% increase year-on-year but a 1% decline quarter-on-quarter. For the first half of the fiscal year, sales amounted to Rs90.1 billion, a 4% increase compared to the previous year.
The report highlighted a 33% year-on-year rise in royalty expenses, which totaled Rs10.6 billion, representing 24% of net sales. Operating expenditures for the second quarter reached Rs12.0 billion, a 20% decrease year-on-year but a 44% increase from the previous quarter. The operating expenditure per barrel of oil equivalent (BOE) was recorded at US$3.86, surpassing recent averages and expectations.
The exploration expenses were recorded at Rs1.9 billion, despite no significant exploration activities. Additionally, finance income declined by 40% quarter-on-quarter, primarily due to a lower cash balance and exchange losses resulting from the appreciation of the Pakistani Rupee.
The effective tax rate for the company rose to 35%, compared to 25% in the same quarter last year and 32% in the preceding quarter. Despite these challenges, Mari Energies declared an interim dividend of Rs8.3 per share for the second quarter, reflecting a 35% payout ratio for the first half of the fiscal year. This contrasts with the absence of a dividend in the first half of the previous year.
The report concluded with a "HOLD" stance on Mari Energies, noting that the company is trading at a fiscal year 2026 estimate and 2027 forecast price-to-earnings ratio of 15.7 and 12.9 times, respectively.
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