SUI SOUTHERN GAS COMPANY LIMITED
S.KAMAL HAYDER KAZMI,
Research Analyst, PAGE
June 28 - July 04, 2010
Sui Southern Gas Company (SSGC) is engaged in the business of transmission and distribution of natural gas besides construction of high pressure transmission and low pressure distribution systems.
SSGCL transmission system extends from Sui in Balochistan to Karachi in Sindh comprising over 3,200 KM of high pressure pipeline ranging from 12 ñ 24î in diameter. The distribution activities covering over 1200 towns in the Sindh and Balochistan are organised through its regional offices. The company also owns and operates the only gas meter manufacturing plant in the country, having an annual production capacity of over 550,150 meters. During the year ended 2009, meter manufacturing division produced and assembled 650,460 meters. Sui Southern Gas Provident Fund Trust Company (Private) Limited is a wholly owned subsidiary of SSGC.
SSGC has an authorised capital of Rs10 billion of which Rs6.7 billion is issued and fully paid up. The government owns the majority of the shares which are presently over 70 per cent.
During the nine months period (July-Mar), gas sales was increased by 2 per cent in volume and 7 per cent in value, standing at 290.7 bcf and Rs80.9 billion as compared to corresponding period of last year. The average sales price per mmbtu increased by 5 per cent to Rs289.60 versus Rs285.07. The increase or decrease in sale price has no impact on the company's profits due to its unique tariff regime. The operating cost also increased over the corresponding period by Rs1,026 million or 25 per cent due to impact of staff cost.
The company's financial charges were increased by Rs374 million or 11 per cent over comparable period and stood at Rs3,780 million. This was mainly due to the impact of increased long term loans. The profit before tax decreased to Rs105 million as compared to Rs603 million. Projects
After substantial completion of expansion program under GIREP-I, SSGC has embarked on the execution of Gas Infrastructure and Rehabilitation Expansion Programme-II. SSGC has spent an estimated Rs12 billion on GIREP-II & QPCEP-III with the normal expansion of gas transmission and distribution system involving the extension of transmission and distribution network by around 700 Kilometers excluding the project still at conceptual stage.
FINANCIAL PERFORMANCE (RS IN '000)
INDICATORS 31 MARCH, 2010 31 MARCH, 2009 Net Sales 72,253,637 78,017,536 Gross Profit 2,080,988 4,416,987 Profit Before Tax 104,677 604,644 Profit After Tax (306,494) 391,791 EPS (Rs) (0.46) 0.58 Indicators 31 March, 2010 30 June, 2009 Total Current Assets 60,378,508 61,032,600 Total Current Liabilities 66,170,120 59,251,203
Ten years ago SSGC embarked on a major mission to use technology as strategic assets. LAN based redundant Host systems at Karachi and Shikarpur provided both online and historical data.
In the second phase, SSGC is now undertaking a distribution of SCADA system that will provide for custody Transfer, Load Forecasting, Gas Analysis and other Gas Management functions.
In Pakistan, the supply of gas has exhibited an increase of 1.6 per cent during July-March 2009 -10. The increase in supply owes to higher production of 1.6 per cent in natural gas during the period under review. Due to this increase in availability of natural gas, the overall consumption of gas remained higher during the period. Furthermore, the sector wise consumption of gas suggests that the household, commercial, fertiliser and transport sector witnessed positive growth in consumption of gas during 2008?09.
More recently, with the exception of cement and power sectors, many major sectors have witnessed positive growth rates during July-March FY10. The consumption of gas by industry has witnessed a significant increase of 5.3 per cent during July-March 2009?10 especially after it declined by 1.1 per cent during 2008?09.
The increase in industrial consumption owes to rise in domestic demand for manufacturing production during the period. The maximum decline of 72.7 per cent has been witnessed in cement sector's gas consumption on the back of contraction in its external demand during the period along with the switch over to coal for production. Decline in power sector's gas consumption is based on the inter-corporate circular debt. On the other hand, gas consumption in the transport sector increased due to shift from imported fuel oil to relatively cheaper source of gas during July-March 2009 - 10.
The future for gas demand and supply conditions in Pakistan remains uncertain. There is a considerable confusion over whether gas supply to CNG stations would be curtailed during the 3 months of winter or not. There is a chance that the industrial sector might suffer from gas shortage due to increased demand for natural gas in households during winters. As a Pakistan's leading integrated gas company, SSGC has planned various projects to enhance the availability of gas in different areas. These projects will be outfitted with new technologies for efficient problem solving and billing procedures.