AGL 23.55 Increased By ▲ 0.61 (2.66%)
AIRLINK 111.00 Decreased By ▼ -0.29 (-0.26%)
BOP 5.33 Increased By ▲ 0.08 (1.52%)
CNERGY 3.72 No Change ▼ 0.00 (0%)
DCL 8.09 Increased By ▲ 0.10 (1.25%)
DFML 43.87 Increased By ▲ 3.60 (8.94%)
DGKC 88.06 Increased By ▲ 0.06 (0.07%)
FCCL 22.10 Increased By ▲ 0.11 (0.5%)
FFBL 42.10 Decreased By ▼ -0.10 (-0.24%)
FFL 8.85 Increased By ▲ 0.30 (3.51%)
HUBC 151.90 Decreased By ▼ -1.39 (-0.91%)
HUMNL 10.59 Increased By ▲ 0.14 (1.34%)
KEL 4.50 No Change ▼ 0.00 (0%)
KOSM 3.84 Decreased By ▼ -0.01 (-0.26%)
MLCF 36.85 Increased By ▲ 0.05 (0.14%)
NBP 48.40 Increased By ▲ 0.41 (0.85%)
OGDC 132.16 Increased By ▲ 0.36 (0.27%)
PAEL 26.37 Increased By ▲ 0.22 (0.84%)
PIBTL 6.09 Increased By ▲ 0.06 (1%)
PPL 115.70 Increased By ▲ 0.20 (0.17%)
PRL 22.77 Increased By ▲ 0.17 (0.75%)
PTC 12.66 Increased By ▲ 0.08 (0.64%)
SEARL 55.72 Increased By ▲ 0.03 (0.05%)
TELE 7.40 Increased By ▲ 0.20 (2.78%)
TOMCL 38.30 Increased By ▲ 1.30 (3.51%)
TPLP 7.93 Increased By ▲ 0.08 (1.02%)
TREET 15.36 Increased By ▲ 0.06 (0.39%)
TRG 59.96 Increased By ▲ 5.41 (9.92%)
UNITY 31.60 Decreased By ▼ -0.26 (-0.82%)
WTL 1.18 Increased By ▲ 0.01 (0.85%)
BR100 8,394 Increased By 49.9 (0.6%)
BR30 26,459 Increased By 112 (0.42%)
KSE100 79,337 Increased By 350.4 (0.44%)
KSE30 25,467 Increased By 102.2 (0.4%)

Sui Northern Gas Pipelines Limited (PSX: SNGP) recently announced its financial performance for the 1QFY20 where the decline in earnings continued; SNGP announced a 36 percent slip in bottom-line for FY19 due to weaker 4QFY19, and the 1QFY20 again saw earnings taking a slide.

The gas marketing company’s revenues have continued to climb on the back of growth in gas sales that stood over 35 percent year-on-year in 1QFY20. Overall, total revenue of the company stood over 40 percent including differential margin. Gas sales growth is attributed to rising share of RLNG imports, which is expensive than domestic gas; higher gas tariff as well as impact of higher oil prices and currency depreciation on RLNG prices.

And despite a 41 percent increase in the cost of sales, SNGP’s gross profit jumped by 45 percent year-on-year. With no significant increase in expenses, lower UFG, and 47 percent increase in other operating income led to 65 percent growth in operating profits.

The damage to the bottomline came from the finance cost that grew by 140 percent year-on-year, which according to a research note by Arif Habib Limited led the growth in differential margin from Rs2 billion in 1QFY19 to Rs12 billion in 1QFY20. This affected the liquidity position of the company and SNGP had to revert to short term borrowing for working capital. Differential margin are receivables created by the disparity between prescribed gas prices and consumer tariff, recoverability of which have always been a challenge for the gas marketing company. Also, rising late payment surcharge resulted in higher finance cost. As a result, SNGP’s earnings took a dip by 28 percent year-on-year and net margins halved in 1QFY20.

Comments

Comments are closed.