SNGPL suffers Rs244 million loss in six months

LAHORE: The Sui Northern Gas Pipelines (SNGPL) has suffered a net loss of Rs244 million in the first six months of the current fiscal year despite an increase of 18 per cent in gas charges.

Consumers will be in for a big shock if the government allows a further tariff increase to keep the company solvent.

According to information given to shareholders by the SNGPL, they will suffer a loss of Rs0.44 per share of Rs10. This is for the first time that the company has gone into loss, says the audit review report.

During the period, the company also developed a huge gap between receivables and payables. It has receivables of Rs15.06 billion against the federal government and Wapda and owes Rs40.44 billion to the Oil and Gas Development Corporation, Pakistan Petroleum and Government Holdings.

With net payables of Rs25.38 billion, it is clear that inter-corporate debt adjustment would have little effect on the company’s financial health.

During the period, the company’s liabilities increased from Rs52.56 billion to Rs57.58 billion.

SNGPL’s long-term liabilities went up from Rs53.8 billion to Rs55.67 billion.

The company also could not offer profit to its shareholders at the end of last fiscal year.

Its assets stand at Rs48.07 billion and liabilities Rs57.58 billion — a difference of Rs9.51 billion.

During the six months, it sold 289 billion cubic feet (Bcf) of gas and suffered transmission losses of 27.6Bcf -- lost sale of Rs7.3 billion or Rs1.22 billion a month.

The company’s losses will multiply if the Oil and Gas Regulatory Authority (Ogra) imposes a fine for failing to meet the line losses standards.

Ogra may slap a “Rs2.44 billion disallowance on profit” on current transmission losses. Last year, the authority had imposed a Rs5 billion disallowance on profit for failing to meet transmission losses targets. The company has failed once again to meet the targets.

“Beyond the numerical rigmarole, it is virtual bankruptcy,” an official said.

He said the situation, by all means, was precarious for the company.

For the past two months, the company has been disbursing travel and medical allowance to its employees selectively.

There are rumours that the management is planning to draw provident fund of employees and invest it in the company’s assets.

Chairman of the SNGPL board of governors Mian Misbahur Rehman said he had taken over only three days ago and had sought all financial statements. “But at the moment I cannot comment on itLINK.”