Sui Southern Gas Company Limited (SSGC) has announced a consolidated loss after tax of Rs. 9.31 billion in the half-year that ended on December 31st, 2022, dangerously up by 396 percent YoY from Rs. 1.88 billion in the same period last year.
The company did not announce any cash dividend for its shareholders during the period in review.
Net revenue from contracts with customers for 1HFY22 arrived at Rs. 123.5 billion, depicting a 20 percent YoY decline from Rs. 153.9 billion in 1HFY21.
Administrative and selling expenses increased by 15 percent from Rs. 2.37 billion in 1HFY21 to Rs. 2.72 billion in 1HFY22, while other operating expenses spiked by 18 percent to Rs. 6.25 billion during the period in review.
The company reported a gross loss of Rs. 2.2 billion by the end of 1HFY22, compared to a gross profit of Rs. 2 billion in the same period last year.
Other income during the period decreased by 4 percent YoY from Rs. 8.1 billion to Rs. 7.8 billion. Conversely, the finance cost of the company increased by 36 percent YoY to Rs. 3 billion during 1HFY22.
SSGC reported losses per share of Rs. 10.58 during the period, as compared to an LPS of Rs. 2.13 in 1HFY21.
The company said in a brief note that as per its unconsolidated financial statements, trade debts include receivables of Rs. 29,971 million and Rs. 25,170 million which includes an overdue balance of Rs. 29,652 million and Rs. 25,100 million from K- Electric (KE) and Pakistan Steel Mills Corporation (Private) Limited (PSML) respectively, which has been considered good by management and classified as current assets in the unconsolidated condensed interim 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.
Due to the adverse operational and financial conditions of PSML, disputes by KE and PSML with the Company on LPS, and large accumulation of their respective overdue amounts, SSGC was unable to determine the extent to which the total amounts due from KE and PSML were likely to be recovered and the time frame over which such recovery will be made.
Interest accrued includes interest receivable of Rs. 11,530 million and Rs. 5,379 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 disputes of the Company with WAPDA and SNGPL, and the large accumulation of their respective overdue amounts of interest, SSGC said it was unable to determine the extent to which the interest accrued amounts due from SNGPL and WAPDA are likely to be recovered including the time frame 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 its future operations is dependent on the government’s support.
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The loss is due to SSGC officers’ corrupt practices