Sui Northern Gas Pipelines Limited’s (SNGPL) has announced its financial results for the nine months ended March 31 219.
The state-owned utility’s profit surged by 31% to Rs. 7.82 billion as compared with a profit of Rs. 5.98 billion in the same period of last year.
The growth in profits was mainly due to the incredible surge in gas sales which increased by 66.70% to Rs. 489.244 billion as compared with Rs. 293.51 billion in the same period last year.
However, the cost of gas sales was Rs. 542 billion, which increased by 59.33% from Rs. 323 billion taking the gross profit to Rs. 28.11 billion, up by 90.19% as compared with Rs. 14.78 billion.
According to Arif Habib Limited, SNGPL’s sales surged due to the growing share of expensive imported gas – re-gasified liquefied natural gas (RLNG) – in total sales and an increase in locally produced gas prices in October 2018.
Surprisingly, the finance cost of the company massively increased by three times (172%) due to the increase in interest rates – to Rs. 17.4 billion from Rs. 6.40 billion.
SNGPL relied on increased borrowing to meet working capital requirements. There was a slight decrease in gas theft (UFG) by 10.3% in the nine months under review compared to 10.8% in the same period of the previous year.
Earnings per share increased to Rs. 12.33 in the period under review from Rs. 9.43 in the corresponding period of the previous fiscal year.
The Auditors of the company (AF Ferguson & Co Chartered Accountants) had issued a qualified opinion on the FY18 accounts as the company had recognized disputed revenue on ‘take or pay’ basis; Rs. 6.66 billion was booked between July 2017 and December 2018.
Following that, the matter was referred for arbitration to an expert. Auditors have now concluded that the above matter does not warrant a qualified opinion, as of 2QFY19.
At the time of filing this report, SNGP’s shares at the bourse were trading at Rs. 64.50, down by Rs. 1.24 or -1.89% with a turnover of 310,500 shares on Thursday.