Sui Southern Gas Company (SSGC): FY17 EPS Rs1.7 vs. LPS of Rs6.7 in FY16 (Above Expectations)
- Sui Southern Company Limited (SSGC) announced its financial result for FY17, where the company announced EPS of Rs1.7 vs. LPS of Rs6.7 in FY16.
- We believe, SSGC has recorded onetime gain of around Rs5-7bn on account of revised UFG benchmark of 2.6% under local conditions over and above technical benchmark of 4.5%. This enhanced the company’s UFG allowable benchmark to 7.1% for FY13-16.
- To note, SSGC was allowed UFG of 6.0-6.1% during FY13-16 as per the study conducted by KPMG on UFG.
- Further, we believe, SSGC has taken the impact of Sindh High Court (SHC) decision, which was supposed to bring down Company’s profitability by Rs27bn during FY16-17.
- Company recorded 41% YoY increase in its operating expenses, which is higher than its revenue growth of 13% YoY.
- Potential risks to SSGC’s profitability include: 1) further increase in UFG losses, 2) non-recovery of dues and 3) lower than expected capex.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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