Mari Petroleum Company Limited (PSX: MARI), one of Pakistan’s leading oil and gas explorers, reported a contraction in profitability for the first quarter ended September 30, 2025, as a massive surge in production-related costs severely compressed its margins.
The company announced a profit after tax (PAT) of Rs 15.82 billion, marking a 17.6% decline from the Rs 19.20 billion earned in the same period last year. This drop occurred despite net sales holding steady at Rs 45.35 billion, virtually unchanged from the previous year.
The primary driver of the profit decline was a 104.2% year-on-year explosion in royalty and wellhead charges, which soared to Rs 11.27 billion from Rs 5.52 billion. This single item drastically altered the company’s cost structure.
The gross profit margin contracted sharply to 46.3%, down 1,070 basis points from 57.0% last year. Consequently, the net profit margin also fell to 34.9% from 42.4%.
Earnings per share (EPS) decreased to Rs 13.15, down 17.7% from Rs 15.99 in the prior year. A 26.3% reduction in exploration expenditure and an 85.4% increase in other income provided some relief against the rising operational and finance costs.
The company’s profit before taxation saw a 20.0% decline to Rs 23.27 billion. After accounting for a taxation charge of Rs 7.45 billion, the bottom-line profit settled at Rs 15.82 billion.
The results underscore the challenges faced by exploration and production companies, where even stable sales can be overwhelmed by rising statutory and operational costs, directly impacting shareholder returns.
