Sui Northern Gas Pipelines Limited (SNGPL) has announced its financial results for the fiscal year 2023-24, reporting a profit after tax of Rs. 18.97 billion, an increase of 80 percent compared to Rs. 10.56 billion recorded in the same period last year. The company posted an earnings per share (EPS) of Rs. 13.01, reflecting a significant jump of 280 percent year-on-year (YoY) and 123 percent quarter-on-quarter (QoQ).
According to Topline Securities, the sharp rise in earnings is primarily attributed to a higher rate of return allowed to SNGPL, set at 26.22 percent for the full FY24, compared to the previously determined rate of 20.64 percent. As per channel checks, while the accounts for the first nine months of FY24 were based on a 20.64 percent return on assets formula, the revision to a 26.22 percent rate for the full year caused earnings in the fourth quarter to appear inflated.
The Oil and Gas Regulatory Authority (OGRA) granted the higher return to SNGPL in FY24 as a corrective measure. In FY23, Sui Southern Gas Company (SSGC) had been awarded a return of 23.45 percent, whereas SNGPL received only 16.60 percent. To address this disparity, SNGPL was allowed a higher return for FY24. Additionally, the company had approached the High Court regarding the unequal returns awarded in FY23.
Meanwhile, SNGPL reported a distribution Unaccounted-for-Gas (UFG) rate (indigenous) of 7.74 percent against the allowed benchmark of 7.21 percent, leading to a disallowance of 53 basis points or Rs. 2 billion.
The company has also restated its financial accounts, revising down gross profit and finance cost figures, impacting quarter-on-quarter comparisons.
SNGPL recorded an effective tax rate of 36 percent in FY24, up from 33 percent in FY23. Alongside the financial results, the company announced a final cash dividend of Rs. 7.5 per share for FY24, compared to Rs. 4.5 per share in FY23.
Currently, SNGPL is trading at forward price-to-earnings (P/E) multiples of 4.6x and 5.2x for FY25 and FY26, respectively.
 has announced its financial results for the fiscal year 2023-24, reporting a profit after tax of Rs. 18.97 billion, an increase of 80 percent compared to Rs. 10.56 billion recorded in the same period last year. The company posted an earnings per share (EPS) of Rs. 13.01, reflecting a significant jump of 280 percent year-on-year (YoY) and 123 percent quarter-on-quarter (QoQ).){kind=link}