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SNGPL profit crosses Rs 2 billion mark: 22 percent dividend declared

KARACHI (November 22 2003): Sui Northern Gas Pipeline (SNGPL) profit for the year ended June 30, 2003, totalled Rs 2.015 billion, higher by 7 percent compared to last year, and the company declared a dividend of 22 percent.

The SNGPL on Friday announced the financial results for the year ended June 30, 2003, and for the first quarter ended September 30, 2003.

The profit for the year ended June 30, 2003, reached Rs 2.015 billion as compared with Rs 1.888 billion of the preceding year.

The earning per share rose to Rs 4.03 from Rs 3.78 a year ago while net sales rose by 12 percent to Rs 42.460 billion as compared with Rs 37.920 billion of previous year.

In the first quarter of current fiscal year ended September 30, 2003, the profit recorded a tremendous growth of 24 percent to Rs 577 million, or 1.16 rupees a share, against Rs 466 million or 0.93 rupee a share of the same period a year ago.

The main factor behind growth in sales was that most of electricity producers and cement manufacturers in the country have switched to gas from fuel oil, because of phenomenal rise in crude oil prices since Iraq war, an analyst said.

The company for the year ended June 30, 2003 declared a dividend of 22 percent or 2.2 rupees a share, up from 2 rupees a share or 20 percent for the preceding year.

Owing to the rising supply of gas in the country, Sui Northern has spent Rs 17 billion to Rs 18 billion over the last five years (FY99-FY03), and is planning to spend further Rs 34 billion (over next five years) to expand its infrastructure for gas distribution.

Therefore, with a fixed 17.5 percent return on average net operating assets, the company's profitability is expected to be impacted favourably.

Sui Northern also benefited from a decline in interest rates. This significant amount of financial leverage, as visible by debt-equity ratio of 64:36, has enabled the company to benefit from reduced financial charges during FY03, which are expected to decline by 9 percent or Rs 132 million, and its effect is expected to carry into the future as well, as expensive loans keep getting paid off.

Sui Northern has announced an ambitious capex plan worth Rs 34 billion to be carried out over FY04-FY08.

The proposed capex plan is based on expected gas supply from new gas fields during 2003-2008.

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