Sui Northern Gas Pipelines Limited (SNGP) announced its 1QFY20 financial result today, posting a profit after tax (PAT) of PKR 1,880mnmn (EPS: PKR 2.96), depicting a decline of 28% YoY compared to a bottom-line of PKR 2,596mn (EPS: PKR 4.09) during SPLY. The board announced a no interim cash dividend during the period under review.
Exhibit: Financial Highlights | ||||||
PKR mn | 1QFY20 | 1QFY19 | YoY | 4QFY19 | QoQ | |
Gas sales | 214,442 | 158,035 | 36% | 195,382 | 10% | |
Gross profit | 11,797 | 8,135 | 45% | 7,681 | 54% | |
Operating profit | 13,804 | 8,374 | 65% | 8,122 | 70% | |
Financial costs | 11,029 | 4,592 | 140% | 8,355 | 32% | |
Profit / (Loss) after tax | 1,880 | 2,596 | -28% | (744) | n/m | |
EPS / (LPS) PKR | 2.96 | 4.09 |
| (1.17) |
| |
DPS PKR | – | 1.50 |
| 2.00 |
| |
Source: Company Financials, AHL Research | ||||||
Result Highlights
· Gas sales of the company jumped up by 36% YoY in 1QFY20 given volumetric growth in RLNG imports (+19% YoY), hike in natural gas tariff as well as impact of higher oil prices and PKR depreciation on imported RLNG prices.
· During 1QFY20, operating profit exhibited a robust jump of 65% YoY; augmenting capital expenditure (PKR 21.82bn estimated for FY20) tagged with lower UFG (OGRA estimates UFG for the year at 11.21% under RERR vs. 10.86% in SPLY) aided the operating profitability.
· Finance costs of the company escalated to PKR 11,029mn in 1QFY20, up by 140% YoY led by rise in differential margin (receivable from the Government under the provisions of license for transmission and distribution of natural gas granted to the Company by OGRA) to PKR 12bn (1QFY19: PKR 2bn). As a result, SNGP relied on increased borrowing to meet working capital requirements. Moreover, growing quantum of late payment surcharge also augmented financial charges.
· The company booked effective taxation during 1QFY20 at 32% (1QFY19: 31%).
AHL Research