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Sui Northern Gas Pipelines Limited (PSX: SNGP) announced its financial performance for the 2QFY20 as well as 3QFY20 yesterday and the overall picture for 9MFY20 shows a decline of 26 percent, year-on-year in the gas utility’s bottomline. The delay in issuance of the backdated financial statements has been identified as late determination of final revenue requirements by the regulator.

Disaggregating the results show that while the first quarter of FY20 (1QFY20) witnessed an increase gas sales as well as total revenues - which came about due to rising share of expensive RLNG imports,; higher gas tariff as well as impact of higher oil prices and currency depreciation on RLNG prices – the second and third quarter posted 18 and 90 percent decline in gas sales year-on-year, respectively. This resulted in overall gas sales for 9MFY20 up by only 3.8 percent year-on-year.

And where the1QFY20 witnessed a reduction in the volumes of UFG versus those in 1QFY19, UFG disallowance arising due to UFG benchmark increased as a result of currency depreciation during he 9MFY20. This adversely affected the bottomline.

Also, a big role in earnings attrition was played by the finance cost that remained high in all the three quarters due to increased working capital requirements in RLNG supply chain.

SNGP continues to face liquidity issues; it had negative operating cash flows for the year ending June 30, 2019 (FY19). And unlike FY19 where the company announced Rs2 per share dividend for FY19 in addition to interim cash dividend already paid at Rs1.50 per share, the nine-months of FY20 did not see any dividend announcement by the gas company.