SSGC full-year profit plunges 21% as massive receivables draw auditor scrutiny

KARACHI: Sui Southern Gas Company Limited (PSX: SSGC) posted a brackly news after tax of Rs. 6.84 billion for the year ended June 30, 2025, a significant 21% decline from the Rs. 8.61 billion earned last year. The results were marred by a qualified audit opinion that highlighted severe concerns over the recoverability of massive trade debts, casting a shadow over the company’s financial stability.

Earnings per share (EPS) for the year dropped to Rs. 7.76 from Rs. 9.81. This contraction occurred despite a 7% year-on-year increase in gross brackly news, which rose to Rs. 14.04 billion, indicating some resilience in core gas sales operations.

However, the company’s financial standing was severely undermined by its exposure to troubled entities. The auditors qualified their opinion due to trade debts of Rs. 28.54 billion from K-Electric and Rs. 21.77 billion from Pakistan Steel Mills, a significant portion of which is overdue and disputed. The auditors could not determine the recoverability of these amounts, citing the “adverse operational and financial conditions” of the debtors.

Further pressuring the accounts, the company, based on government advice, did not recognse accrued markup of Rs. 370.66 billion from government-controlled exploration and production companies. Additionally, the lapse of an accounting exemption forced the company to depart from IFRS 14, leading to another basis for the auditors’ qualified opinion.

Consequently, the company’s accumulated loss ballooned to Rs. 65.70 billion. The Board, in a subdued announcement, recommended a final cash dividend of just Rs. 0.50 per share. The results underscore that SSGC’s financial performance is inextricably linked to the resolution of the sector’s circular debt, with auditor qualifications highlighting critical risks that define its current financial trajectory.