As always (at least in the recent couple of years), Sui Northern Gas Pipeline Limited (SNGPL) announced its due annual report and the first quarter performance quite late. The gas utility has been facing a shortfall of 400 million cubic feet per day (mmcfd) in the ongoing winter season, resulting in what has become a norm every year shortage of gas for domestic and commercial users alike.
SNGPL is the largest integrated gas company serving more than five million consumers in North Central Pakistan through an extensive network in Punjab, Khyber Pakhtunkhwa, and Azad Jammu & Kashmir. However, the state-owned company has been fraught with corruption and misgovernance, which along with no reforms in the gas distributions sector have dampened the utilitys profitability severely.
The firms (backdated) financial performance for FY16, however, has at least come out of the losses; SNGPLs earnings have turned green. Similarly, 1QFY17 has also seen profits compared to losses in 1QFY16.
During the first quarter of the ongoing fiscal, gross sales of the company increased by 21 percent year-on-year, while that of FY16 also increased by 26 percent year-on-year primarily led by higher LNG sales. The firm assigns increase in sales and lower UFG losses to the improvement in gross profits.
LNG is the critical factor for SNGPL for driving up the bottomline, especially when no other concrete reform measures are apparent. That is why SNGPL has been investing in LNG infrastructure.
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