Mari Energies Limited (MARI) reported a 6 percent year on year decline in profit for the first half of FY26, even as stronger oil production and lower costs supported quarterly earnings growth. Alongside the results, the company announced an interim cash dividend of Rs. 8.30 per share, signaling confidence in its cash flows. According to the company’s financial statement released on Monday, profit after tax fell to Rs. 26.44 billion in 1HFY26, with earnings per share (EPS) of Rs. 23.69. However, performance improved on a quarterly basis, as 2QFY26 profit rose 15 percent YoY to Rs. 12.8 billion, driven by higher oil production and sharply lower exploration expenses. Net sales during the second quarter increased 8 percent YoY to Rs. 44.77 billion. Oil production climbed 6 percent YoY, while gas output remained under pressure due to lower production at key fields. Output from the Shewa gas field more than doubled quarter on quarter, partially offsetting declines elsewhere. An analyst note from Arif Habib Limited stated, “Earnings growth was supported by increased oil production, a 20 percent reduction in operating costs, and a 50 percent decline in exploration expenses.” Costs, Tax, and Cash Position Despite operational gains, royalty charges surged 33 percent YoY due to higher wellhead revenues, while the effective tax rate rose to 35 percent, weighing on overall profitability. Finance income also declined sharply due to lower interest rates. The company’s cash balance dropped to Rs. 60.8 billion, while trade receivables increased, reflecting delayed payments in the energy sector. MARI is currently trading at FY26 and FY27 forward P/E multiples of 15.8x and 11.8x, respectively, with dividend yields of 2.6 percent and 3.4 percent. Analysts view the restored payout ratio as a positive signal, though rising receivables and gas output challenges remain key risks.