Mari Energy’s Profit Climbs 7% to Nearly Rs. 50 Billion in Nine Months
In a challenging macroeconomic environment, Mari Energies Limited (PSX: MARI) has delivered a resilient financial performance. The Pakistani exploration and production (E&P) giant posted a consolidated net profit of Rs. 49.71 billion for the nine months ended March 31, 2026, marking a 7% year-on-year (YoY) increase compared to Rs. 46.53 billion in the same period last year .
This performance is particularly noteworthy given the headwinds facing the broader oil and gas sector, including fluctuating global crude prices and regulatory pressures. The company’s earnings per share (EPS) improved to Rs. 41.41 from Rs. 38.75 in 9MFY25, signaling robust operational health .
For investors and market watchers tracking the Pakistan Stock Exchange (PSX) , MARI’s results offer a compelling case study in navigating cost pressures while capitalizing on production efficiencies.
Breaking Down the Numbers: Revenue, Royalties, and Tax Relief
A closer look at the financial statement reveals a nuanced story. While net sales grew by a steady 5% to Rs. 138.30 billion (up from Rs. 132.29 billion), the company faced significant cost pressures, primarily from a 32% spike in royalties amounting to Rs. 33.16 billion . This increase is largely attributed to the additional 15% wellhead payment due on the Mari Field effective from November 2024 .
Here is the financial breakdown at a glance:
| Metric | 9MFY26 | 9MFY25 | Change |
|---|---|---|---|
| Gross Sales | Rs. 157.13 bn | Rs. 149.63 bn | +5% |
| Net Sales | Rs. 138.30 bn | Rs. 132.29 bn | +5% |
| Royalties | Rs. 33.16 bn | Rs. 25.16 bn | +32% |
| Profit Before Tax | Rs. 64.25 bn | Rs. 66.82 bn | -4% |
| Taxation | Rs. 14.54 bn | Rs. 20.28 bn | -28% |
| Net Profit | Rs. 49.71 bn | Rs. 46.53 bn | +7% |
Source: Mettis Global
Despite the dip in operating profit subtotals, the critical catalyst was a sharp 28% reduction in taxation, which dropped to Rs. 14.54 billion . This significant tax relief helped offset higher operational costs, allowing the bottom line to secure its 7% growth.
Moreover, other income surged by an impressive 264% to Rs. 2.22 billion, providing an additional buffer against the 41% decline in finance income, which fell due to a lower interest rate environment .
The Third Quarter Standout: A 33% YoY Jump
The third quarter of FY26 (Jan-Mar 2026) was particularly strong for Mari Energies. The company posted a Profit After Tax (PAT) of Rs. 21.1 billion (EPS: Rs. 17.6) , reflecting a massive 33% YoY increase . This outperformance was driven by higher revenues and a surprisingly low effective tax rate.
According to Dawn News, while the broader PSX witnessed a volatile session (dipping 1,577 points due to geopolitical tensions), Mari Energies Ltd outperformed, acting as a beacon of stability for investors .
Production metrics also showed strength:
- Oil Production: Increased 13% YoY to 1,282 barrels per day.
- Gas Production: Rose 4% YoY to 946 million cubic feet per day.
- Shewa Field: Production surged nearly 11 times YoY , providing a meaningful boost to overall volumes .
Challenges and Strategic Outlook
It is not all smooth sailing. The E&P sector in Pakistan is currently projected to see a decline in profitability amid lower oil prices and reduced gas production . Mari Energies faces specific challenges:
- Exploration Costs: Exploration expenses shot up by 68% YoY to Rs. 4.9 billion in Q3, primarily due to dry well costs (Pario-1) .
- Receivables: The company’s trade receivables have increased to Rs. 92.0 billion, indicating potential delays in government payments or circular debt issues .
- Dividend: The Board of Directors has recommended no cash dividend for this period, which might disappoint income-focused investors .
However, management remains focused on expanding its exploration portfolio. The company holds a significant footprint with 34 exploration licenses covering vast areas across Pakistan and even an offshore license in Abu Dhabi .
Investment Takeaway
Mari Energies continues to demonstrate why it is a heavyweight in the KSE-100 index. While the removal of the interim dividend and high exploration costs may raise eyebrows, the 7% profit growth in the face of a 32% royalty hike speaks to the company’s operational efficiency.
Valuation Snapshot: According to market data, MARI is currently trading at forward FY26/FY27 P/E multiples of 14x and 9x respectively, with an expected dividend yield of 3% to 5% . The stock closed recently at Rs. 666.02, with an average price target of Rs. 755.50 .
For long-term investors, Mari Energies offers a balanced mix of production growth, strategic exploration, and defensive positioning within Pakistan’s energy landscape.
