SSGC losses increase threefold to Rs2.33 billion

Announces pending results for the quarter ended September 2015

KARACHI: A long wait for financial results of Sui Southern Gas Company (SSGC) came to an end on Wednesday as the gas utility reported financial numbers that showed significant losses.

According to consolidated accounts, SSGC’s losses soared threefold to Rs2.33 billion in the quarter ended September 30, 2015 compared to Rs768.38 million in the same quarter in 2014.

The financial accounts, which were reported at the Pakistan Stock Exchange after the end of shares trading on Wednesday, showed a surge in loss per share to Rs2.66 in the Jul-Sept 2015 quarter from Rs0.87 in the corresponding quarter of previous year.



Stock price of SSGC rose 3.38%, or Rs1.48, to Rs45.21 with a volume of 15.15 million shares at the stock exchange.

The accounts had been pending for a host of reasons including the determination of gas tariff by the Oil and Gas Regulatory Authority and the percentage of gas losses to be recovered from consumers.

The utility books huge losses due to theft and leakage. Such losses are called Unaccounted for Gas (UFG) and the company is allowed to recover a certain percentage from the consumers through monthly billing.

SSGC is allowed to recover 4.5% of UFG from the consumers. KPMG, a consultant, has recently recommended to Ogra to increase it to 5% for the next five years. An exorbitant cost of sales, which remained higher than net sales proceeds, has caused the steep losses. Cost of sales came in at Rs45.91 billion against net sales of Rs43.83 billion in the Jul-Sept quarter.

In the corresponding quarter of previous year, the cost stood at Rs42.10 billion and net sales at Rs41.57 billion. Financial cost of the company rose 18% to Rs2.56 billion from Rs2.18 billion. Other operating income halved to Rs435.35 million from Rs806.86 million.

The company posted financial results for three and nine months of fiscal years 2013, 2014 and 2015.

Earlier in June 2016, the firm announced results for the nine months ended March 31, 2016. During the period, losses surged 87% to Rs9.37 billion (loss per share Rs10.65) compared to Rs5 billion (loss per share Rs5.68) in the same period of previous year.

Published in The Express Tribune, March 9^th, 2017.

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