Sui Southern Gas Company Limited (SSGC) reported a significant financial turnaround for Q1FY24 (Sep 30, 2023), posting a profit of Rs 4.16 billion (earnings per share: Rs 4.72), compared to a loss of Rs 5.16. 59 billion (loss per share: Rs 6.35) during the same period last year.
The company’s improved performance was driven by a combination of factors, including a slight increase in its net profits, lower costs of sales, lower operating expenses, and a significant reduction in taxes. SSGC’s revenues rose 1.4%, to Rs 117.85 billion, largely due to tariff adjustments.
Gross profit saw a significant rise of 114.1%, reaching a total of Rs 5.76 billion, supported by a 1.3% decrease in cost of sales. Gross margins improved to 4.9%, compared to 2.3% in the same period last year. Other income also increased by 52.4% to Rs 5.41 billion.
On the expenses side, administrative and selling expenses increased by 20.9%, while the expected credit loss provision decreased by 7.2%. The company also announced a sharp 80.5% decline in other operating expenses. However, higher financing costs due to higher interest rates increased by 96.7%, reaching Rs 3.24 billion.
SSGC also benefited from a sharp decline in tax payments, with tax expense falling by 73.6% to Rs 238.83 million, compared to Rs 903.82 million during the same period in FY23.