KARACHI – Though operating assets of Sui Southern Gas Company (SSGC) are likely to increase by an annual 7.6 percent, net operating assets are expected to increase by only 8.2 percent due to a meager 3.4 percent rise in deferred credit.
Operating assets are anticipated to increase faster compared to deferred credit since SSGC finances most of its capital expenditures through debt financing.
SSGC is scheduled to announce its results for the first half of financial year 2011 on Friday (today), in which the company is likely to report a net loss of Rs 750 million (LPS Rs 0.89), earnings before interest and tax of Rs 1,001 million (down by an annual 67 percent) and top line of Rs 58,034 million (up by a yearly 32 percent).
The Oil and Gas Regulatory Authority (OGRA) is yet to decide on the Unaccounted for Gas (UFG) benchmark for FY11. Assuming actual UFG losses of nine percent for the 1HFY11, we expect absolute UFG losses of Rs 2,483 million (after tax per share impact of Rs 1.92 per share), said Naukhaiz Saleem at Foundation Securities. He further said that, in case, SSGC prepares its accounts at a benchmark of seven percent, UFG losses will slide to Rs 1,237 million (after tax per share impact of Rs 0.96).
In addition, non-operating income is expected to remain steady at Rs 2,142 million in 1HFY11 compared to Rs 2,124 million in 1HFY10. Financial charges are likely to fall by an annual 18 percent to Rs 2,155 million as a result of an improvement in liquidity position of the company following FY10 results.
