SNGPL’s profit rises 36% to Rs1.9 billion

Company records lower UFG losses, strong capital expenditure

KARACHI: Sui Northern Gas Pipelines Limited (SNGPL) posted net earnings of Rs1.9 billion for the quarter ended September 2017, up 36% compared with Rs1.4 billion in the same period of last year, according to a company notice sent to the Pakistan Stock Exchange (PSX).

The result was above market expectations. Earnings per share (EPS) stood at Rs3.03 in Jul-Sep 2017 compared with Rs2.21 in the corresponding quarter of previous year.

The company announced an interim dividend of Rs1.50 per share for the quarter.



On the same day, SNGPL also announced its results for fiscal year ended June 30, 2017, in which it posted a net profit of Rs8.62 billion compared with Rs124 million in the previous year. EPS was recorded at Rs13.58 in FY17 compared with Rs0.20 in the preceding year.

SNGPL announced a final cash dividend of Rs6 for fiscal year 2017.

Its share price closed at Rs124.49, up 4.9% on a day when the benchmark KSE-100 index ended at 41,105, down 304 points or 0.73%.

Brokerage houses attributed the strong earnings growth to higher capital expenditure on account of LNG-II pipeline and lower unaccounted-for-gas losses (UFG) in FY17.



SNGPL carried out capital expenditure of around Rs20 billion in the first nine months of FY17 and it had planned a total capital expenditure of around Rs60 billion on the LNG-II pipeline.

Similarly, the UFG level stood at 8% in FY17 compared with 10% in fiscal year 2016. This drove operating profits to Rs17.9 billion from Rs4.2 billion.

The company operates on the return-on-assets formula, hence, its profitability is directly proportional to its asset expansion and status of UFG losses.

Published in The Express Tribune, October 28^th, 2017.

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