Sui Southern Posts Loss of Rs. 11.4 Billion for FY22

Sui Southern Gas Company Limited (SSGC) has announced a consolidated loss after tax of Rs. 11.41 billion in the financial year (FY) that ended on June 30th, 2022.

According to the government-owned entity’s financial results, the losses come after a profit of Rs. 2.26 billion in FY21.

Net revenue from contracts with customers for FY22 arrived at Rs. 375.5 billion, depicting a 27 percent YoY rise from Rs. 296.1 billion in FY21.

Administrative and selling expenses increased by 14 percent from Rs. 4.6 billion in FY21 to Rs. 5.2 billion in FY22, while other operating expenses spiked drastically by 4,300 percent from Rs. 464 million to Rs. 20.4 billion in FY22.

The company reported a gross profit of Rs. 7.7 billion by the end of FY22, compared to a gross loss of Rs. 5.7 billion in the same period last year.

Other income during the period decreased by 8.5 percent YoY from Rs. 19.2 billion to Rs. 17.6 billion. Conversely, the finance cost of the company increased by 12.3 percent YoY to Rs. 5.2 billion during FY22.

SSGC reported losses per share of Rs. 12.95 during the period, as compared to earnings per share of Rs. 2.57 in FY21.

Moreover, SSGC said in a note that per its unconsolidated financial statements, trade debts include receivables of Rs. 29,652 million and Rs. 25,312 million from K-Electric Limited (KE) and Pakistan Steel Mills Corporation (Private) Limited (PSML), respectively, a significant portion of such receivables include overdue amounts, which have been considered good by management and classified as current assets in the unconsolidated financial statements.

Further, KE and PSML have disputed Late Payment Surcharge (LPS) on their respective balances due to which management has decided to recognize LPS on a receipt basis from the aforesaid entities effective from July 01, 2012.

The company mentioned that further interest accrued includes interest receivable of Rs. 10,957 million and Rs. 5,101 million from Sui Northern Gas Pipeline Limited (SNGPL) and Water and Power Development Authority (WAPDA), respectively. These have been accounted for in line with the Company’s policy of charging LPS on overdue amounts, but have not been acknowledged by the counter-party.

Due to a dispute with WAPDA and SNGPL, and the large accumulation of their respective overdue amounts of interest, SSGC was unable to determine the extent to which the interest accrued amounts due from SNGPL and WAPDA are likely to be recovered including the timeframe over which such recovery will be made.

SSGC added that the Government of Pakistan (Finance Division) has confirmed to extend necessary financial support to the Company for the foreseeable future to maintain its going concern status. Hence, the sustainability of the future operations of the Company is dependent on the said support.

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