PPL profit falls on lower gas prices

ISLAMABAD: Pakistan Petroleum Ltd, the nation’s biggest gas producer, said second-quarter profit fell 20 percent because of lower prices.

Net income fell to 4.78 billion rupees ($56.4 million), or 4.80 rupees a share, in the three months ended Dec. 31, from 6 billion rupees, or 6.03 rupees, a year earlier, the Karachi- based company said in a statement to the stock exchange today. Revenue declined to 13.1 billion rupees from 13.8 billion rupees.

“The price at which the company sells gas has fallen in line with declining crude, resulting in lower revenue,” said Muhammad Farhan, research analyst at Atlas Capital Markets Ltd., in Karachi, who has a “buy” recommendation on the stock.

The price at which Pakistan Petroleum sells gas fell by about 20 percent during the second quarter, according to Atlas Capital. Gas production accounts for 90 percent of the company’s output.

Pakistan Petroleum’s shares fell 0.91 percent to 195 rupees as of 11:30 a.m. local time at the Karachi Stock Exchange. The share price has climbed 3 percent this year.

Pakistan Petroleum plans to pay a dividend of 40 percent on ordinary shares and 30 percent on convertible preference shares, according to the statement.