The Newswire

Your daily serving of financial goodness

Empire Lifts Pre-Tax Profit by 253%

Empire Lifts Pre-Tax Profit by 253%
Empire expects its average gas production rate of 9.4TJ/day to continue in the foreseeable future.
Mar 11, 2016 By Kaivalya Kandarpa Tags: EGO

Empire Oil and Gas NL (ASX:EGO) released financial results for the first half of FY16 showing EBIT growth of 150% while its statutory Net Profit declined 80% compared to pcp.

Improved Operating Performance

Empire improved its operating performance by implementing a cost reduction program which resulted in a 14% drop in operational expenditure. Other expenses declined 17.3% for the period.

Revenue from gas and condensate (a by-product of Empire’s gas production) rose 12.6% to $10.5 million despite the substantial decline in global oil prices during the period.

Subsequently, pre-tax profit jumped 253% to $1.7 million. Empire’s gross profit grew 14.9% to $7.4 million while its cost of sales increased 7.4% to $3.06 million during the period.

The company attributed its improved results to a 64% expansion in its Red Gully’s 1P gas reserves and a 30% increase in its 2P gas reserves. The company is confident of supplying all of its future  gas production under additional sales arrangements with Alcoa.

Empire reported that its value proposition for FY16 has been further strengthened by a new gas discovery made at the Red Gully North-1 well, which is set to add to the immediate benefits and strengthen future prospects of other sites.

As at December 2015, the company has $6.8 million in cash and cash equivalents and generated positive operating cash flow of $1 million.

Positive Outlook

Empire’s Chief Executive Officer, Mr. Ken Aitken elucidated the results and provided insights on the company’s outlook: “The 1H FY16 financial results demonstrate the continued operational excellence of the Empire team. While we can’t control oil and condensate prices in challenging market conditions, Empire will focus on delivering operations excellence and another strong six months of financial results in H2 FY16 and extend our exploration success with upcoming test results from Red Gully North-1.”

The company expects its average gas production rate of 9.4TJ/day to continue in the foreseeable future. It also anticipates to generate $20.3 million in revenue, with the additional gas sales to Alcoa offsetting the decrease in realised condensate sale price.

The upbeat anouncment has sent EGO 10.1% higher to 38 cents as at 11:53 AM (AEDT).

Share this article

Kaivalya Kandarpa Author: Kaivalya Kandarpa Mar 11, 2016

Kaivalya is an equity analyst and a client advisor at Wise-owl. She specialises in fundamental and technical analysis for large and mid-cap companies. Having completed her bachelor's degree in Business Administration majoring in Finance, Kaivalya has a comprehensive understanding of international stock market movements. She tracks local and overseas markets and compiles analytical reports for various industries.

Medical marijuana treatment for animals?

Demand for pot companies reached an all-time high in 2017 as overhyped medical marijuana companies flooded the local market, taking advantage of investor appetite for ‘the next big thing’.

Author: Simon Herrmann Oct 18, 2017

Errors

Sign Up for Free Trial
Subscribe
Recent Tweets
Recent News