SNGPL’s shareholders approve 40% cash dividend

SNGPL’s shareholders have approved a 40 percent cash dividend for the financial year 2019-20.

Shareholders of Sui Northern Gas Pipelines Limited (SNGPL) held its 56th Annual General Meeting on Thursday to consider approval of cash dividend. The shareholders of the Company approved the Annual Accounts for the FY 2019-20 with profit after tax of Rs. 5,998 million translating into EPS of  Rs 9.46.

The shareholders also approved a Cash Dividend of 40%  i.e. Rs. 4.0 per share on the recommendations of the Board of Directors of SNGPL. Moreover, the Shareholders of the Company re-appointed M/s. Yousaf Adil, Chartered Accountant as Auditors for FY 2020-21.

The Chairperson, Ms. Roohi Raees Khan informed the shareholders that despite numerous economic, financial challenges, SNGPL remained focused on yielding good results under the wise guidance of the Board of Directors along with consistent efforts of the Management and staff.

She added that the Company declared the dividend for the third consecutive year.

She also briefed the shareholders about the Board of Directors’ first-ever visit to Khyber Pakhtunkhwa and meeting with the Chief Minister Khyber Pakhtunkhwa.

Chairperson appreciated the role of the Khyber Pakhtunkhwa Government in supporting the process of laying of Company’s distribution network in the areas of Karak etc., the highest UFG loss areas, which has resulted in a significant reduction in UFG losses.

She further informed that the Board is also in the process of formulating 5 years strategic business plan under the dynamic leadership of the newly appointed Managing Director who would undertake the digitization processes to improve efficiency and transparency.

A detailed interactive session was held. A number of suggestions were noted and the shareholders were responded to their satisfaction.

Ms. Roohi Raees Khan, Chairperson, Mr. Ali J. Hamdani, Managing  Director, Mr. Mohammad Haroon, Mr. Ahmad Aqeel and Dr. Sohail Razi Khan, Directors, Mr. Faisal Iqbal, Chief Financial Officer, Mr. Imtiaz Mehmood, Company Secretary were present in person while

Mr. Sualeh Ahmad Faruqui, Mr. Muhammad Haroon ur Rafique, Mr. Afan Aziz, and Syed Akhtar Ali, Directors attended the meeting via video link. Senior Management of the Company was also present at the Annual General Meeting (AGM).

The Chairperson, Board of Directors, acknowledged the commendable efforts made by the Board Members, Management, Staff, and especially the Ministry of Energy (Petroleum Division) for their constant support and guidance.

SNGPL has earned profit after tax of Rs.5,998 million and EPS of Rs. 9.46 as compared to profit after tax of Rs 7,076 million and EPS of Rs. 11.16 during the corresponding period of last year.

Based on the declared profit, SNGPL had proposed a final cash dividend of 40% for FY 2019-20 earlier.

Financial Results for the year under review is given below:

(Rs. in Million)

Profit before taxation                                   8,417

Provision for taxation                         (2,419)

Profit after taxation                                      5,998

Following are the primary reasons, which have resulted in a decrease in Company’s profitability as compared to the corresponding year;

1. a) Increase in UFG percentage from 11.86% to 12.32% and accordingly UFG disallowance from Rs 10,528 to Rs 11,742 million. Even though UFG volumes decreased from 52.5 BCF in the previous year to 48.3 BCF during the current year, the increase in UFG percentage is mainly due to a decrease in the availability of indigenous gas volumes during the year. However, the value of disallowance increased due to an increase in National WACOG used for valuing UFG disallowance by the Regulator. It is pertinent to highlight that OGRA has continued to value UFG disallowance at National WACOG even though the arrangement for using WACOG has been held in abeyance by the Economic Coordination Committee (ECC) of the Cabinet in the meeting held on May 17, 2018. Moreover, an amount of Rs 419 million pertaining to previous has also been included by OGRA in UFG disallowance on the basis of finalized WACOG for FY 2018-19. The Company has taken up the matter with the Ministry of Energy for directions in this regard.
2. b) Increase in finance cost was primarily due to higher interest rates during the year which adversely impacted the Company’s profitability.

Moreover, SNGPL has also declared its quarterly results for the first quarter ended September 30, 2020. Profit after tax earned by the Company during the quarter under review is Rs 3,181 million as compared to profit after tax of Rs. 1,880 million during the corresponding quarter of last year.

Read More: SNGPL losses down to less than one digit

Earnings per share for the quarter is Rs. 5.01 as against the earnings per share of Rs. 2.96 for the corresponding quarter of last year. Owing to a decrease in finance cost by Rs. 1,176 million and a decrease in UFG disallowance by Rs. 648 million, your Company has witnessed an increase in profit during the first quarter.

Read More: Ministry seeks waiver of SNGPL’s LPS

Despite all the economic, financial, circular debt challenges and prevailing lockdown situation due to Covid-19 in the country, the Company has managed to post a profit. This has been achieved under the guidance of the Board of Directors and with the consistent efforts of the Management and staff. The Company’s management is hopeful of better results in future.