FINANCIAL ANALYSIS OF PAKISTAN OIL-FIELD

LIMITED

BY: M. TAHA UDDIN KHAN GHORI

COMPANY OVERVIEW

POL is the symbol of Pakistan Oilfield Limited in KSE-100.

POL was incorporated in November 25, 1950. POL is a

leading oil and gas exploration and production company.

Its revenue have stood Rs. 28,624 million in 2012. Its

earning price have increased to Rs. 50.1 in 2012.

BALANCE SHEET COMPOSITION

43%

20%

37%

Assets - 2012Total fixed assets

Other long-term asset

Total current assets

42%

21%

38%

Assets - 2011Total fixed assets

Other long-term asset

Total current assets

BALANCE SHEET COMPOSITION

67%

21%

12%

Shareholder equity and liability

2012

Total share holder equity

Total non-current liabili-tiesTotal current liabilty

71%

17%

12%

Shareholder equity and liability

2011Total share holder equity

Total non-current liabili-tiesTotal current liabilty

HORIZONTAL ANALYSIS BALANCE SHEET (Note Rupees (‘000)) 2012 2011 Difference

change in %

         

SHARE CAPITAL AND RESERVES        

Issued, subscribed and paid up capital 2,365,459 2,365,459 0 0%

Revenue reserves 32,847,810 31,048,217 1,799,593 5.80%

Fair value gain on available-for-sale investments

57,973 9,412 48,561 515.95%

Total Share Holder Equity 35,271,242 33,423,088 1,848,154 5.53%

         

NON CURRENT LIABILITIES        

Long term deposits 504,448 487,314 17,134 3.52%

Deferred liabilities 10,504,449 7,710,102 2,794,347 36.24%

Total noncurrent liabilities 11,008,897 8,197,416 2,811,481 34.30%

         

CURRENT LIABILITIES AND PROVISIONS

       

Trade and other payables 4,465,713 4,045,039 420,674 10.40%

Provision for income tax 1,593,673 1,373,662 220,011 16.02%

Total current liabilities 6,059,386 5,418,701 640,685 11.82%

         

Total liability 17068283 13616117 3,452,166 25.35%

TOTAL SHARE CAPITAL AND LIABILITIES

52,339,525 47,039,205 5,300,320 11.27%

FIXED ASSETS        Property, plant and equipment 4,163,781 4,257,760 -93,979 -2.21%Development and decommissioning costs

15,687,791

10,568,414

5,119,377 48.44%

Exploration and evaluation assets 2,883,055 4,810,730 -1,927,675 -40.07%

Total fixed assets22,734,62

719,636,90

43,097,723 15.78%

         Long Term Investments In Subsidiary And Associated Companies

9,615,603 9,615,603 0 0%

Other Long Term Investments 658,672 69,677 588,995 845.32%Long Term Loans And Advances 16,273 20,067 -3,794 -18.91%         CURRENT ASSETS        Stores and spares 2,939,308 2,632,488 306,820 11.66%Stock in trade 134,199 126,411 7,788 6.16%Trade debts 3,006,567 4,343,528 -1,336,961 -30.78%Advances, deposits, prepayments and other receivables

601,966 662,879 -60,913 -9.19%

Short term investments 3,898,907 3,226,550 672,357 20.84%Cash and bank balances 8,733,403 6,705,098 2,028,305 30.25%

Total current assets19,314,35

017,696,95

41,617,396 9.14%

         

TOTAL ASSETS52,339,52

547,039,20

55,300,320 11.27%

HORIZONTAL ANALYSIS

INCOME STATEMENT (Note Rupees

(‘000))2012 2011

Difference

change in %

NET SALES 28,624,0

5524,950,7

073,673,34

814.72%

Cost of goods sold-

11,117,627

-9,322,98

0

-1,794,64

719.25%

GROSS PROFIT 17,506,4

2815,627,7

271,878,70

112.02%

Exploration costs -593,554-

1,075,045

-481,491 44.79%

Administration expenses -113,339 -83,101 -30,238 36.39%

OPERATING PROFIT16,799,5

3514,469,5

812,329,95

416.10%

Other charges -

1,286,588

-1,104,23

7-182,351 16.51%

Other operating income 2,547,20

71,808,59

6738,611 40.84%

EBIT18,060,1

5415,173,9

402,886,21

419.02%

Finance cost -684,576 -223,930 -460,646 205.71%

PROFIT BEFORE TAXATION 17,375,5

7814,950,0

102,425,56

816.22%

Provision for taxation -

5,522,783

-4,135,00

0

-1,387,78

333.56%

NET INCOME11,852,7

9510,815,0

101,037,78

59.60%

HORIZONTAL ANALYSIS

BALNCE SHEET (Note Rupees (‘000)) 2012change in

%2011 change in %

         

SHARE CAPITAL AND RESERVES        

Issued, subscribed and paid up capital 2,365,459 4.52% 2,365,459 5.03%

Revenue reserves 32,847,810 62.76% 31,048,217 66.00%

Fair value gain on available-for-sale investments

57,973 0.11% 9,412 0.02%

Total Share Holder Equity 35,271,242 67.39% 33,423,088 71.05%

         

NON CURRENT LIABILITIES        

Long term deposits 504,448 0.96% 487,314 1.04%

Deferred liabilities 10,504,449 20.07% 7,710,102 16.39%

Total noncurrent liabilities 11,008,897 21.03% 8,197,416 17.43%

         

CURRENT LIABILITIES AND PROVISIONS

       

Trade and other payables 4,465,713 8.53% 4,045,039 8.60%

Provision for income tax 1,593,673 3.04% 1,373,662 2.92%

Total current liabilities 6,059,386 11.58% 5,418,701 11.52%

         

Total liability 17068283 32.61% 13616117 28.95%

TOTAL SHARE CAPITAL AND LIABILITIES

52,339,525 100% 47,039,205 100%

VERTICAL ANALYSIS

FIXED ASSETS        

Property, plant and equipment 4,163,78

17.96% 4,257,760 9.05%

Development and decommissioning costs 15,687,7

9129.97% 10,568,414 22.47%

Exploration and evaluation assets 2,883,05

55.51% 4,810,730 10.23%

Total fixed assets22,734,6

2743.44% 19,636,904 41.75%

         Long Term Investments In Subsidiary And Associated Companies

9,615,603

18.37% 9,615,603 20.44%

Other Long Term Investments 658,672 1.26% 69,677 0.15%Long Term Loans And Advances 16,273 0.03% 20,067 0.04%         CURRENT ASSETS        

Stores and spares 2,939,30

85.62% 2,632,488 5.60%

Stock in trade 134,199 0.26% 126,411 0.27%

Trade debts 3,006,56

75.74% 4,343,528 9.23%

Advances, deposits, prepayments and other receivables

601,966 1.15% 662,879 1.41%

Short term investments 3,898,90

77.45% 3,226,550 6.86%

Cash and bank balances 8,733,40

316.69% 6,705,098 14.25%

Total current assets19,314,3

5036.90% 17,696,954 37.62%

         

TOTAL ASSETS52,339,5

25100% 47,039,205 100%

VERTICAL ANALYSIS

INCOME STATEMENT (Note Rupees (‘000))

2012 change% 2011 change%

NET SALES 28,624,055

100.00% 24,950,707

100.00%

Cost of goods sold -11,117,62

7

-38.84% -9,322,980

-37.37%

GROSS PROFIT 17,506,428

61.16% 15,627,727

62.63%

Exploration costs -593,554 -2.07% -1,075,045

-4.31%

Administration expenses -113,339 -0.40% -83,101 -0.33%

OPERATING PROFIT 16,799,535

58.69% 14,469,581

57.99%

Other charges -1,286,588 -4.49% -1,104,237

-4.43%

Other operating income 2,547,207 8.90% 1,808,596 7.25%

EBIT 18,060,154

63.09% 2,886,214 11.57%

Finance cost -684,576 -2.39% -223,930 -0.90%

PROFIT BEFORE TAXATION 17,375,578

60.70% 14,950,010

59.92%

Provision for taxation -5,522,783 -19.29% -4,135,000

-16.57%

NET INCOME 11,852,795

41.41% 10,815,010

43%

VERTICAL ANALYSIS

Liquidity Ratio 2012 2011

Current Ratio (times) 3.19 3.27

Working Capital 13,254,964,000 12,278,253,000

Quick Ratio (times) 4.01 3.87

Cash Ratio (times) 3.52 3.07

Profitability Ratio

Return on assets (%) 22.65% 22.99%

Operating income margin (%) 58.69% 57.99%

Gross profit margin (%) 61.16% 62.63%

Return on equity (%) 33.60% 32.36%

Solvency Ratio

Operating cash flow to total debt (%) 89.45% 91.27%

Debt of total assets (%) 32.61% 28.95%

Debt to equity (%) 48.39% 40.74%

RATIOS

Efficiency

Accounts Receivable Turnover (times)

9.52 5.74

Total assets Turnover (times) 0.55 0.53

Accounts Receivable turnover (days)

38.34 63.54

Market Value

Earning per share 50.11 45.72

Price earnings ratio 9.38 10.29

Dividend Payout Ratio 2.00% 2.19%

RATIOS

EARNING PER SHARE

2012 201140

45

50

55

EPS