Sui Northern Gas Posts a 15% Decline in Profits Due to Unaccounted Gas Losses

Sui Northern Gas Pipelines Limited (SNGPL) posted net earnings of Rs 2.12 billion for the 3rd quarter that ended on March 2018, down 15.2% compared to Rs 2.50 billion in the same period last year.

The result was in line with market expectations. Earnings per share (EPS) stood at Rs 3.34 in Jan-Mar 2018, down 15% compared with Rs 3.94 in the corresponding quarter of previous year.


The profits were down by 15% due to higher operating expenses which were up by 32% Year over Year. The net sales of the company surged to Rs 133 billion in the Q3FY18 as compared to Rs 71.87 billion which was up 85.06%.

Gross profit of the company was up by 31% to Rs 4.07 billion. The operating income was also up by 10%. Other operating expenses increased by 32% denting profitability of the company – due to exchange losses as Pakistani rupee depreciated by 5% during this quarter.

During the 9MFY2018, SNGPL’s profits remained flat, which is likely due to the absence of any major capitalizations as well as likely minimal deviation in UFG losses.

It has reduced its Un-accounted For Gas (UFG) losses by 3.1 percent during a period of three years.

The company’s UFG losses were 11.17 percent in June 2013, which have been curtailed and brought to 8.07 percent in June 2017.

In line with the international practices, the UFG is calculated with the difference between the metered gas volume injected into the transmission and distribution network – Point of Dispatch (POD) – and the metered gas delivered to the end consumers at Consumer Meter Station (CMS) during a financial year.

The gas theft, law and order affected areas, minimum billing, leakages, measuring errors and shift of bulk sales to retail sector were among the major UFG contributing factors.

The UFG, being one of the most critical elements in the gas sector, played a vital role in the profitability of the gas transmission and distribution companies.

The Finance cost also increased by 51% which is mainly due to completion of the first LNG pipeline. To note, earlier the interest expense was being capitalized.

SNGP’s script at the bourse was trading at Rs 113.94, up by 1.19% with a turnover of 2.32 million shares.