SNGPL Earnings Up 280% in 4QFY24
Staff Report
Karachi: Sui Northern Gas Pipeline Limited (SNGPL) has reported earnings per share (EPS) up 280% in its 4QFY24 results.
The company announced its 4QFY24 results on Monday, wherein the company has reported EPS of Rs 13.01, up 280% YoY and 123% QoQ.
The significant jump in earnings is on the back of a higher rate of return allowed to SNGP to the extent of 26.22% for the full year of FY24, compared to the previous 20.64% determined rate of return.
The 9MFY24 accounts were based on a 20.64% return on assets formula; however, due to the allowance of a higher return of 26.22% (for FY24), the 4Q seems to be inflated, in our view.
The Oil and Gas Regulatory Authority (OGRA) has allowed a higher return to SNGP in FY24, as in FY23, SSGC was awarded a higher return of 23.45% while SNGP was awarded 16.60%.
To compensate for this disparity in FY23 returns, SNGP is allowed a higher return in FY24, in our view. SNGP also approached the high court and pleaded for this disparity in FY23. The media has conveyed this issue last week.
Furthermore, as per our channel checks, SNGP has reported distribution UFG (indigenous) of 7.74% vs. the allowed benchmark of 7.21%, resulting in disallowance of 53bps or Rs2 bn.
The company has also restated its accounts and made some changes in accounting entries, which is why gross profits and finance costs are revised down for QoQ comparison, in our view.How To Check SNGPL Bill Online 2025
The company has recorded an effective tax rate of 36% in FY24 compared to 33% in FY23.
Alongside the results, the company has also declared a dividend of Rs7.5/share for FY24 vs. Rs4.5 for FY23.
The company has been trading at FY25 and 26F PE of 4.6x and 5.2x, respectively. The Topline said that its earnings estimates for FY25 and FY26 were based on returns of 25.92% and 23.3%, respectively.
