Corporate results: SNGPL announces profit of Rs1.4b for quarter ended Sept 30

Gross sales of company increase 21% year-on-year to Rs72 billion


Our Correspondent December 28, 2016
PHOTO: FILE

KARACHI: Sui Northern Gas Pipeline Limited (SNGPL) announced a net profit of Rs1.4 billion for the quarter ended on September 30 compared to a loss of Rs548 million in the same period last year, according to a company notice sent to the Pakistan Stock Exchange (PSX).

The result was in line with expectations, stated a Topline Securities report. Gross sales of the company increased by 21% year-on-year to Rs72 billion in first quarter of fiscal year 2017 (1QFY17) led by higher revenues on account of LNG sales.

Gross profits of the company also improved to Rs3.9 billion in 1QFY17 compared to Rs554 million in 1QFY16. We attribute this to higher sales and lower Unaccounted for Gas (UFG) losses during the quarter, stated the notification.

Increasing investment in LNG infrastructure and lower UFG ratio is likely to drive bottom-line of the company going ahead. The government has allowed capital expenditure of Rs27 billion (inclusive of LNG) for SNGPL in fiscal year 2017.

This is expected to take operating assets of the company to Rs139 billion in fiscal year 2017 from Rs111 billion in fiscal year 2016. To recall, the government plans to increase LNG imports from 400 million cubic feet per day (mmcfd) to 1200 mmcfd to meet gas shortfall in the country.

For the purpose, SNGPL has been investing on LNG pipeline infrastructure.

Other operating income was 13% lower due to lower late payment surcharge from customers, according to the report.

However, this was compensated by lower selling cost, down 17% to Rs1.2 billion. Resultantly, operating profits increased to Rs3.3 billion in first quarter of fiscal year 2017 compared with Rs334 million in 1QFY16.

UFG loss ratio is expected to clock in below 9% in fiscal year 2017, which is lower than historical UFG loss ratio of over 11% while the UFG disallowance amount to decline to Rs7 billion in fiscal year compared with Rs7.5 billion in fiscal year 2016 and Rs11.6 billion in fiscal year 2015.

Published in The Express Tribune, December 29th, 2016.

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