Mari Energies Profit Jumps 34pc to Rs87 Billion, Dividend Hits Rs27

ISLAMABAD: Mari Energies Limited closed fiscal year 2026 with annual profit surging to Rs87.07 billion, though a favourable tax ruling amplified the bottom-line increase as operating profit grew only marginally.

Standalone net profit rose 33.7 percent from Rs65.14 billion the year before. Earnings per share followed, climbing to Rs72.52 from Rs54.25.

Directors recommended a final cash dividend of Rs18.70 per share, or 187%, adding to the Rs8.30 interim dividend paid earlier in the year; combined, the two payouts bring FY2026 dividends to Rs27 per share, equal to 270% of face value. No bonus or right shares accompanied the announcement.

Mari Energies profit figure reflects the reversal of Super Tax following a ruling from the Federal Constitutional Court of Pakistan a detail that explains much of what follows.

A Flatter Story Beneath the Headline

Operating profit, stripped of tax effects, rose just 1.4 percent, moving from Rs81.45 billion to Rs82.55 billion. Profit before taxation went the other way entirely, falling to Rs83.25 billion from Rs88.17 billion a year earlier. What closed that gap, and then some, was a Rs3.82 billion tax reversal set against a Rs23.04 billion tax provision booked the previous year, a swing large enough to account for most of the net profit increase on its own.

Royalties played their part in squeezing operating margins. The company said an incremental Rs8.5 billion charge under Rule 35 of the Pakistan Onshore Petroleum (Exploration and Production) Rules, 2013, added directly to costs during the year, pushing total royalty expense to Rs45.72 billion from Rs35.61 billion. Exploration and prospecting expenditure rose as well, to Rs17.23 billion from Rs14.86 billion, even as gross sales advanced nearly 9 percent to Rs218.01 billion and net sales reached Rs191.66 billion, up 8.2% from Rs177.10 billion.

Production Numbers Point to a Different Trajectory

Where the profit line tells a story shaped largely by taxation, Mari's production figures point somewhere more durable. Hydrocarbon sales reached a record 41.28 million barrels of oil equivalent 113,100 barrels per day up from 39.13 million a year earlier, a milestone the company reached despite excess RLNG supply crowding out capacity for much of the year and ruptures in the SNGPL pipeline disrupting output.

Reserves grew faster still. Mari added 157 million barrels of oil equivalent in proved and probable reserves, translating into a reserve replacement ratio of 375 percent, while total 2P reserves combined with 2C contingent resources reached an estimated 1.029 billion barrels of oil equivalent by year-end. The company's reserve-to-production ratio climbed to 21 years, an all-time high.

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Two fields began contributing during the year under review. Early production from Spinwam in the Waziristan Block started April 1, adding up to 50 MMSCFD and lifting the block's total output to 100 MMSCFD of gas alongside roughly 800 barrels per day of condensate; the Shams discovery within Mari Field came online June 19, adding more than 35 MMSCFD. Separately, the company allocated 222 MMSCFD of raw gas from its Ghazij Field to three fertiliser customers, and once that allocation is fully implemented, every fertiliser plant in Pakistan will draw its gas supply from Mari Field.

Production Numbers Point to a Different Trajectory

The exploration portfolio grew to 72 licences during the year, spanning 155,276 square kilometres across onshore and offshore basins, acquired through a mix of competitive bidding and direct acquisition. MariMinerals, meanwhile, drilled more than 45,000 metres in operated blocks, and the company is now building a core preparation and testing laboratory in Islamabad under Mari MSA Labs (Pvt) Ltd.

Technology has become the newest front in that diversification. Mari Technologies Limited, operating through subsidiary SKY47 Limited, commissioned its first data centre this year a 5-megawatt Tier III facility called Karakoram-01 in Islamabad while a second facility in Karachi continues under development. On the emissions side, the company formed a joint venture, GHG Emissions Mitigation Limited, with Ghani Chemical Industries Limited to capture and process vent gas from the Sui Gas Processing Complex into liquefied natural gas and food-grade carbon dioxide. Land has been acquired, a financing mandate has been signed with Habib Bank Limited, and procurement of plant and equipment is underway.

Capex Absorbs a Larger Share of Cash Flow

Capital expenditure climbed 51 percent to Rs72.60 billion from Rs48.17 billion, absorbing a substantially larger share of the cash generated by Mari's operations. The company generated Rs95.81 billion from operating activities, but cash and cash equivalents ended the year at Rs58.99 billion, down from Rs76.93 billion, as investing and financing outflows weighed on liquidity.

PACRA reaffirmed Mari's AAA long-term and A1+ short-term ratings in January, and the company said overdue trade debts fell to Rs61.7 billion from Rs66.9 billion on the back of improved collections from customers.

Shareholders on record as of September 21 will receive the final dividend. The share transfer books close from September 22 through September 25, and the company's Annual General Meeting follows on September 25 at the Islamabad Serena Hotel.

Two readings of FY2026 will compete for investor attention. One is the headline: a 34 percent profit jump and a Rs27-per-share annual dividend. The other lies deeper in the numbers: record hydrocarbon sales, a 375 percent reserve replacement ratio and capital expenditure up more than 50 percent. Those operating and investment metrics may ultimately matter more, because Mari's next challenge is converting a rapidly expanding asset base into earnings growth without the benefit of another tax reversal.