Karachi: Sui Southern Gas Company Limited (SSGC) has announced its consolidated financial results for the fiscal year ended June 30, 2024, showcasing a notable recovery compared to the previous year. The company reported a consolidated profit of Rs. 8.29 billion, a significant turnaround from the loss of Rs. 836 million in FY 2023. Earnings per share (EPS) stood at Rs. 9.41, compared to a loss per share of Rs. 0.95 in the prior year.
The company’s net revenue increased to Rs. 465.87 billion, up from Rs. 451.48 billion in FY 2023, and it posted a gross profit of Rs. 10.38 billion, though lower than the Rs. 28.18 billion recorded in the previous year. However, steep increase in other incomes and a drop in other expenses, not disclosed with the announcement saw the company get in a significantly better position.
Resultantly, the operating profit improved to Rs. 25.15 billion, a substantial increase from Rs. 8.20 billion in FY 2023. And despite finance costs rising to Rs. 13.40 billion, compared to Rs. 8.64 billion in the prior year, reflecting higher borrowing expenses, the company was able to declare a profit 1000% more than the precious year.
Despite the improved performance, the auditors highlighted concerns over the recoverability of trade debts totalling Rs. 47.48 billion from K-Electric (KE) and Pakistan Steel Mills (PSML). A significant portion of these receivables is overdue, and disputes over Late Payment Surcharge (LPS) remain unresolved. The auditors noted that the company’s decision to recognise LPS on a receipt basis adds uncertainty to the recovery timeline.
Additionally, the auditors emphasised other risks, including pending legal cases with uncertain outcomes, and an accrued markup of Rs. 276.08 billion related to government-controlled entities, which remains unrecognised based on government advice.
In FY 2023, SSGC faced significant financial headwinds, reporting a consolidated loss of Rs. 836 million. The company struggled with high operating expenses, tariff adjustments, and liquidity constraints. The loss per share of Rs. 0.95 reflected these challenges, compounded by rising finance costs and unresolved receivables.
SSGC’s directors cited delayed determinations and notifications of prescribed prices by OGRA, as well as inadequate subsidy disbursements, as major obstacles in cost recovery. The company also highlighted its reliance on short-term borrowings to finance operations—a stopgap measure that is inflating its interest burden.
The utility emphasised that its losses are “regulatory in nature” and that the accounting treatment for revenue shortfalls and UFG adjustments will be subject to future decisions by OGRA. The company maintains it is operating under the assumption of a going concern, bolstered by government support and expected tariff adjustments.
For FY 2024, the Board of Directors recommended no cash dividend, bonus shares, or right shares, maintaining a conservative approach amid ongoing financial and operational challenges. The Annual General Meeting (AGM) is scheduled for June 16, 2025, in Karachi.
While SSGC has demonstrated improved profitability in FY 2024, the company’s financial health remains under pressure due to unresolved receivables, litigation risks, and high leverage. The company’s stock saw an immediate uptake after the announcement of the results, marking an intraday gain of 7.65%.
Sui Southern Gas Company Limited is a leading natural gas utility in Pakistan, responsible for transmission and distribution in Sindh and Balochistan. The company plays a critical role in the country’s energy sector.
