Sui Southern Posts Profit of Rs. 6.5 Billion for H1 FY23

Sui Southern Gas Company Limited (SSGC) has announced a consolidated profit after tax of Rs. 6.5 billion in the first half of financial year (FY) ended on December 31st, 2023. According to the government-owned entity’s financial results, the gains come after a loss of Rs. 9.3 billion in the same period last year. Net revenue from contracts with customers for 1HFY23 arrived at Rs. 176.6 billion, depicting a 43 percent YoY rise from Rs. 123.4 billion in 1HFY22. Administrative and selling expenses increased by 27 percent from Rs. 2.72 billion in 1HFY22 to Rs. 3.46 billion in 1HFY23, while other operating expenses spiked drastically by 89.5 percent from Rs. 6.25 billion to Rs. 651.7 million in 1HFY23. The company reported a gross profit of Rs. 8.1 billion by the end of 1HFY23, compared to a gross loss of Rs. 2.19 billion in the same period last year. Other income during the period increased by 61 percent YoY from Rs. 7.79 billion to Rs. 12.54 billion. Meanwhile, the finance cost of the company increased by 119 percent YoY to Rs. 6.6 billion during 1HFY23. SSGC reported earnings per share of Rs. 7.38 during the period, as compared to a loss per share of Rs. 10.58 in 1HFY22. According the company’s unconsolidated condensed interim financial statements, trade debts includes receivables of Rs. 26,289 million and Rs. 22,954 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 said it 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. 12,666 million and Rs. 6,242 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 explained that 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.