Sui Northern Gas Pipelines Limited (SNGPL) recently released their 1HFY2017 report where the company declared that they have reduced their unaccounted for gas (UFG) losses to 7.75pc in the period under review, compared to 9.76pc in the corresponding period last year.
Accordingly, the UFG disallowance, which directly erodes the company’s profitability, has been reduced by almost 50pc to PKR2.2b, compared to PKR4.3b in the corresponding period last year. Moreover, the disallowance on account for provision for doubtful debts has also reduced to around PKR270m as against PKR1.3b recorded in SPLY.
On average, every 1pc increase in UFG benchmark (or 1pc reduction in UFG loss) saves ~PKR1.8-2b (PKR2.8-3/share) for SNGP.
On the other hand, the company’s operating fixed assets have also increased to PKR149b, compared to PKR136b at the end of FY2016. This is mainly attributed to capitalization effects of the first LNG pipeline which is expected to be completed by end of FY2017 where we expect the company’s operating fixed assets to increase to PKR168b.
