Karachi: The Sui Southern Gas Company Limited (SSGC) has reported a notable financial recovery with a profit of Rs. 6,632 million for the nine months ending March 31, 2024, compared to a loss of Rs. 17,350 million in the same period last year. This substantial improvement is attributed to the company's strategic focus on operational efficiency and the reduction of Unaccounted-for Gas (UFG).
The financial statements, presented on March 31, 2024, highlight SSGC's efforts in reducing UFG to 10.74%, a significant decrease from 17.70% recorded in the previous year. The Board of Directors, in partnership with the management, has implemented transformative initiatives aimed at achieving 100% compliance with the Oil and Gas Regulatory Authority's (OGRA) Key Monitoring Indicators.
A major component of the company's strategy includes an extensive distribution network rehabilitation program, which has expanded its target from 750 km to 1,500 km, with 1,095 km completed by March 2024. Looking forward, the company aims to rehabilitate 7,500 km over the next three years, underscoring its commitment to long-term efficiency.
According to information available from the Pakistan Stock Exchange (PSX), SSGC's earnings per share rose to Rs. 7.53 from a loss of Rs. 19.70 per share last year. The company's financial capitalization is projected to increase from Rs. 17 billion in FY 2022-23 to Rs. 25 billion in FY 2023-24, facilitated by enhanced project execution and streamlined operations.
The financial performance has been shaped by OGRA's Guaranteed Return Formula, allowing a 23.45% return on average net operating fixed assets before financial charges and taxes for FY 2022-23. Despite facing adjustments related to efficiency benchmarks, including UFG, human resource costs, and doubtful debts, SSGC has navigated these challenges effectively.
Karachi's operational efficiency has been notable, consistently maintaining UFG below 6%, surpassing OGRA's benchmark of 7.4%. Improvements have also been recorded in Interior Sindh and Balochistan, with UFG reduced to 9% and 38.72% respectively. However, a sustainable UFG structure in Balochistan is dependent on federal policy interventions, for which SSGC continues to advocate.
The financial outlook for SSGC remains positive, supported by strategic investments in network rehabilitation, zonal management, and technological advancements such as the implementation of a state-of-the-art SCADA system across 50 TBS sites.
SSGC's equity and liabilities as of March 31, 2024, stand at Rs. 1.18 trillion, indicating a robust financial structure. The company's cash flow from operating activities increased significantly to Rs. 8.17 billion, demonstrating strong operational cash generation despite challenges in the investing and financing segments.
These developments place SSGC in a favorable position within the Pakistan Stock Exchange's designated market category, reflecting its commitment to delivering reliable and sustainable gas supplies while enhancing customer satisfaction.