KARACHI, Jan 25: Pakistan Petroleum Limited (PPL) posted profit after tax (PAT) at Rs20.1 billion for the first half of the year ended Dec 31, 2011, translating into earning per share (eps) at Rs15.30.

The earnings represented 21 per cent increase over PAT at Rs16.6 billion and eps at Rs12.64 for the corresponding six months of the previous year.

The company declared an interim cash dividend at Rs5 per share.

The PPL announcement was the first from a big ticket company in the current results season.

Most market participants thought that the company had reported stellar growth in earnings, but the board was stingy in payment of dividend.

Consensus expectation was in the range of Rs6 to 7 per share.

The low cash payout pushed investors out of the stock, resulting in the drop in share value by Rs2.56 on Wednesday, to close at Rs178.26 on a heavy turnover of 1.2 million shares.

Syed Atif Zafar, analyst at JS Global, said that the earnings were largely in line with his brokerage house expectations of Rs15.20 per share.

In second quarter alone, earnings clocked in at Rs7.78 per share up 16 per cent over same period last year (YoY). The cash payout by the company of Rs5 per share, however, fell short of market`s expectations.

The analyst at JS attributed the growth in earningsmainly to 18 per centYoY rise in the company`s top line predominantly, led by higher oil and gas production; realised gas wellhead prices and thirdly the international oil prices increase during first half FY12 (1HFY12).

On the other hand, field expenditures soared to Rs6.5billion (up 16pc YoY).

Other income, too, witnessed an increase of 95 per cent YoY to Rs1.9 billion because of higher investments.

Analyst, Nauman Khan at Topline Securities, said that the phenomenal growth in earnings primarily stem from a significant up tick in company`s topline with ample support coming from other operating income.

Company`s topline increased by 21pc to Rs45.3bn on account of favorable price as well as volumetric variance.

On the pricing front, higher Arab light crude price as against the relevant period last year translated into improved net realised hydrocarbon prices while volumes improved on the back of enhanced production from Kohat based fields (Tal and Naspha blocks) in oil and Kandhkot for gas.

Moreover, company`s other income grew by impressive 84 per cent at Rs1.6billion, compared with Rs950million in the same period last year.

`This is due to growing cash balances of the company (amid higher earnings) as company has booked higher interest income on bank placements and T-bills,` the analyst commented.Naveed Vakil, analyst at AKD Securities, observed that the earnings were in line with the brokerage`s forecasted PAT at Rs20.06 and eps Rs15.28.

Earnings growth was underscored by topline expansion which increased by 21 per cent due to higher oil volumes (estimated to have increased by 10 per cent YoY) blended with increase in realised prices.

PPL also posted a 22 per cent YoY increase in field expenditures which the analyst believed was exploration write-offs on suspended JV wells.

Analyst Naveed conceded that the dividend was lower than the expected Rs6 per share.

Mohammad Farhan Malik, analyst at Summit Capital, commented that the earnings for half year were in line with their estimates.

He also stated that the cash dividend at Rs5 per share was also the same as expected.

The mammoth growth in the other operating income was mainly due to higher interest rate as the PPL`s short term investment and cash accounted for almost 20 per cent of the balance sheet footing.

According to Summit Capital analyst, based on the current market price of the PPL stock, its expected earnings and dividend, PPL was trading at a FY12 and FY13 prospective price-to-earnings (p/e) of 5.8 times and 5.0 times respectively and prospective dividend yield of 7 and 8 per cent, respectively.