November 9, 2020 (MLN): Sui Southern Gas Company (SSGC) announced its consolidated financial results for the half-year ended December 31, 2018, on Monday, wherein it reported a Loss after Tax of Rs. 7.51 billion (LPS: 8.54) i.e. 1.2% lower than the losses reported in the same period of last year.
In a notification issued to PSX, the company, along with the financial results, published some excerpts from the Auditors report, which are as follows:
‘The interest accrued includes interest receivable of Rs, 6,983 million and Rs. 3,530 million from Sui Northern Gas Pipeline Limited (SNGPL) and Water and Power Development Authority (WAPDA) respectively. These have been accounted for in line with the Company's practice of charging LPS on overdue amounts but have not been acknowledged by the counter-party.
‘Due to dispute with WAPDA, and large accumulation of their respective overdue amounts of interest, we were unable to determine the extent to which the interest accrued amounts due from SNGPL and WAPDA are likely to be recovered and the timeframe over which such recovery will be made.
‘An amount of Rs. 3,845 million receivable from Habibullah Coastal Private Company Limited (HCPCL) in respect of liquidated damages imposed in arbitration on April 30, 2018, by The International Court of Arbitration. Prior to the decision, the Economic Coordination Committee (ECC) through its meeting held on February 07, 2018, had proposed a waiver of liquidated damages and directed the Ministry of Energy – Petroleum Division to work out modalities in consultation with all stakeholders. However, to date, no agreement has been finalized between the relevant stakeholders.
‘In the absence of the agreement, there is no contractual right to receive cash or financial asset from HCPCL and the requirements of lAS 39 – Financial Instruments are not met. Had management not recognized this receivable, the loss before tax would have increased by Rs. 3,845 million and net assets would have reduced by Rs. 2,730 million.
‘The Company has incurred a net loss after tax of Rs. 7,518 million during the period ended December 31, 2018. Further, staggering of losses and matters discussed in the Basis of Qualified Conclusion Section of the report indicate that material uncertainty exists that may cast significant doubt on the Company ability to continue as a going concern; however, the Company has obtained a support letter from the Government of Pakistan Finance Division dated July 06, 2020, that commits support to maintain the going concern status of the Company.
‘The Company has reversed the late payment surcharge (LPS) expense of Rs. 26,222 million on delayed payables pertaining to gas supplied by Government Controlled E&P Companies i.e. Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holding (Private) Limited (GHPL) with effect from July 01, 2012, to June 30, 2016, and not recorded LPS expense for the year ended June 30, 2017, for the year ended June 30, 2018, and for the half-year ended December 31, 2018, amounting to Rs. 7,569 million, Rs. 7,477 million and Rs. 4,288 million respectively.’
Consolidated Financial Results for the half-year ended September 30, 2020 (Rupees'000)
Gas development subcharge
RLNG differential margins
Cost of goods sold
Gross (loss) / profit
Other operating expenses
Loss before taxation
Loss for the period
Loss per share
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