ISLAMABAD: M/s MARI has reported 42% Quarter on Quarter (QoQ) decline in its earnings to Rs9.3/share primarily because of higher operating expenditures and higher royalty expense.
According to Topline Securities, the result was below expectations as market was expecting earnings of Rs11-14/share. Furthermore, Unlike street expectations of Rs10-15/share, company did not declare any cash dividend for 1HFY25.
Operating expenditure clocked in at Rs15bn, up 115% YoY or 37% of the net sales in 2QFY25 compared to 18% of net sales in 1QFY25 whereas royalty expense clocked in at Rs8bn, up 39% YoY or 19% of the net sales in 2QFY25 compared to 12% in 1QFY25.
Higher royalty expense in outgoing quarter is a result of imposition of additional royalty of 15% from Nov 2024 on Mari field, we believe.
Effective tax rate of company clocked in 25% in 2QFY25 compared to 34% recorded in 1QFY25 and 40% in 2QFY24. Effective tax rate in 1HFY25 reached 31%.
This takes 1HFY25 earnings to Rs25.32/share, down 19% YoY, led by 8% decline in net sales, 58% increase in operating expense, and 106% increase exploration cost.
