Sui Southern Gas Company bleeds Rs11.41bn in losses in FY22

Sui Southern Gas Company (SSGC) incurred massive losses to the tune of Rs11.41 billion in fiscal year 2021-2022.

In the same period last fiscal (FY21), SGGC, which is involved in the transmission and distribution of natural gas in Sindh and Balochistan, saw a profit after tax (PAT) of Rs2.26 billion, according to a notice sent to the Pakistan Stock Exchange (PSX) on Monday.

Resultantly, loss per share (LPS) were recorded at Rs12.95 in FY22 as compared to earnings per share (EPS) of Rs2.57 in the same period last fiscal.

SSGC’s net revenues rose to Rs375.56 billion compared to Rs296.13 trillion in FY21, which is an increase of nearly 27%.

The company’s gross profit stood at Rs7.72 billion in FY22, compared to a gross loss of Rs5.75 billion in FY21.

On a consolidated basis, the company saw a massive increase in its expenses, which stood at Rs27.73 billion in FY22, compared to Rs7.31 billion in FY21, a jump of over 279%.

The rise in the company’s expenses was attributed to an exponential increase in ‘other operating expenses’, which reached Rs20.42 billion in FY22, as compared to just Rs464 million in FY21.

On the other hand, SSGC’s other income was recorded at Rs17.63 billion in FY22, as compared to Rs19.26 billion in FY21, down 8.5%.

As a result, SSGC incurred a loss before tax and interest of Rs2.45 billion in FY22.

The cost of finance increased to Rs5.2 billion in the year ended June 30, 2022, as compared to Rs4.63 billion in FY21, a jump of over 12%. The higher finance cost during the period could be attributed to the rise in interest rates during the period.

Moreover, SSGC disclosed that under the unconsolidated financial statements, trade debts include receivables of Rs29.65 billion and Rs25.31 billion from K-Electric Limited (KE) and Pakistan Steel Mills Corporation (Private) Limited (PSML), respectively.

“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,” SSGC said.

“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, we were unable to determine the extent to which the total amounts due from KE and PSML were likely to be recovered,” said SSGC.

The company also drew attention that in view of its financial position, the Government of Pakistan (Finance Division) has confirmed to extend necessary financial support to the SSGC for the foreseeable future to maintain its going concern status. “Hence, the sustainability of the future operations of the company is dependent on the said support,” SSGC added.