The Sui Southern Gas Company (SSGC) has earned after tax profit of Rs 1.013 billion for the financial year ended June 30, as compared to Rs 0 997 billion in the previous year. The company declared a cash dividend of 15 percent (Rs 1.50 per share) for the financial year ended June 30.
This was announced following a meeting of the board of directors of the company here on Thursday. SSGC Chairman Aitzaz Shahbaz presided over the meeting. The board reviewed and approved the audited accounts of the company for 2004-05.
The transmission and distribution cost as a percentage of revenue was reduced from 7.4 percent to 7.3 percent and the financial charges were brought down by Rs 133 million as compared to the corresponding period of the last year.
According to a statement, the board was informed that during the year under review, the company's gross sales increased to Rs 62.51 billion as compared to Rs 54.45 billion in 2003-04, registering an increase of 15 percent.
The gas sales volume grew to 337,638 MMCF as compared to 318,068 MMCF during the previous year, showing an increase of 6 percent. The increase in volume was mainly on account of increased demand from the cement, fertiliser and other industries as well as domestic customers. Sales to the power sector constituted 46 percent of the total sales. Karachi Electric Supply Corporation (KESC) was again the major customer and accounted for 28 percent of the company's gas sales.
The company's cost of gas per MMCF increased by about 13 percent as a result of increase in wellhead prices and changes in the supply-mix in favour of the more expensive fields.
The company achieved a new landmark in the transmission and distribution of gas of 1.3 BCFD (billion cubic feet per day) during the year. Hence, progress is being made towards the five-year objective of increasing the network capacity to 1.7 BCFD.
During the year under review, the company extended its transmission and distribution network by 1,424km and the customer base by 78,578. A total of 233 new towns and villages in Sindh and Balochistan were provided gas this year.
Two major pipelines laid in Balochistan this year connected the towns of Ziarat and Kalat to the SSGC network and brought urban convenience to villages and 'killies' in the area.
At the same time, 116km pipeline from Hyderabad to Karachi, part of Nawabshah to Karachi pipeline project, was completed on time and well within the budget.
The earnings per share increased to Rs 1.51 as against Rs 1.49 of the last year. This is despite the pressures on account of disallowance of various charges by Oil and Gas Regulatory Authority (Ogra).
During 2004-05, the capital expenditure amounted to Rs 6.2 billion, which is a significant increase over the previous year. An amount of Rs 4.7 billion was capitalised as additions to the fixed asset base. This resulted in additional return, which was largely offset by excess of "Unaccounted for Gas" (UFG) due to line losses and theft during the year under review.
For the year, Ogra issued its final determination of revenue requirements of Rs 55,142 million as against the company's claim of Rs 55,994 million, resulting in a shortfall of Rs 852 million.
A major item contributing to reduction in revenue requirement was UFG for which Ogra determined Rs 694 million being in excess of UFG over the target of 6 percent. The company is filing necessary review motions against the decisions of Ogra in respect of the above items, which have adversely affected the profitability of the company.
Meanwhile, the company initiated a major campaign during 2004-05 to identify and bring to book people or organisations that either consumed gas for power generation without necessary authorisation from the company or bypassed the gas meter installed in their premises and legal action was also taken where deemed necessary. The recovery campaign is yielding positive results and is likely to continue during the current year.
To meet the rising gas demand, the company has imitated a LNG project, which will bring additional gas supplies of 300-500 MMCFD from 2009-10 onwards.-PR
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