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Karachi, Sui Southern Gas Company Limited (SSGC) reported a net loss after tax of Rs. 5,595 million for the three months ending September 30, 2022, following major disallowances by the Oil and Gas Regulatory Authority (OGRA) and significant financial costs. According to information available from the Pakistan Stock Exchange (PSX), the financial results reflect a stark contrast to the previous year’s third quarter, where the company had posted a profit of Rs. 736 million.
During the period under review, SSGC recorded a loss before taxation of Rs. 4,691 million, a sharp decline from a profit of Rs. 1,470 million in the corresponding period of 2021. The loss after taxation deepened to Rs. 5,595 million from a profit of Rs. 736 million last year, marking a negative variation of Rs. 6,331 million year-over-year. Earnings per share also turned negative, registering at Rs. -6.35 compared to Rs. 0.84 in September 2021.
The downturn in financial performance was primarily due to disallowances related to unaccounted-for gas (UFG) and other adjustments made by OGRA. Despite the company’s efforts to reduce UFG, particularly in the Balochistan region where UFG rose to 55.6% of gas volume from 31.9% last year, challenges persist. The financial strain was exacerbated by the devaluation of the Pakistani Rupee against the US Dollar, significantly impacting the weighted average cost of gas, which surged by 54% compared to the previous year.
SSGC’s ongoing struggle with regulatory adjustments and financial burdens has prompted a series of measures aimed at improving operational efficiency and financial stability. These include the establishment of a UFG Hub Division, enhancements in measurement and billing accuracy, and increased efforts against gas theft.
The company remains engaged with both the Ministry of Energy and OGRA to address these regulatory and operational challenges, aiming to secure a more sustainable financial pathway forward.