External broker reports(aggregated public sources), Topline Securities

Topline Securities

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External broker reports(aggregated public sources)

Thematic (Sector/Industry)

Pakistan Oil, gas and consumable fuels / Thematic (Sector/Industry)

<ul>
<li>To recall, Government of Pakistan under the IMF program has sizably increased the gas prices by ~75% in Nov-2023 and ~20% in Feb-2024 to contain the annual pile up of the gas sector circular debt which mounted to around Rs3trn by Jan-2024.</li>
<li>Oil and Gas exploration companies were amongst the top affected companies of this menace. However, post adjustment/increase in gas prices, there has been some improvement in the cashflows of the companies.</li>
<li>To quantify the impact, we have assessed Mar 2024 quarter accounts of the OGDC and PPL. As per which the change in receivables to net sales ratio in 3QFY24/9MFY24 has fallen to 21%/20% of the net sales for both companies cumulatively compared to last six years (FY18-23) average of 29%, signaling partial improvement in recoveries of the E&amp;P companies.</li>
</ul>
<p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>


To recall, Government of Pakistan under the IMF program has sizably increased the gas prices by ~75% in Nov-2023 and ~20% in Feb-2024 to contain the annual pile up of the gas sector circular debt which mounted to around Rs3trn by Jan-2024.
Oil and Gas exploration companies were amongst the top affected companies of this menace. However, post adjustment/increase in gas prices, there has been some improvement in the cashflows of the companies.
To quantify the impact, we have assessed Mar 2024 quarter accounts of the OGDC and PPL. As per which the change in receivables to net sales ratio in 3QFY24/9MFY24 has fallen to 21%/20% of the net sales for both companies cumulatively compared to last six years (FY18-23) average of 29%, signaling partial improvement in recoveries of the E&amp;P companies.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Pakistan Equity - Flash Note; Oil & Gas Exploration