⚡ Flash Summary

Sui Northern Gas Pipelines Limited (SNGP) reported a decrease in revenue inclusive of tariff adjustment for the quarter ended September 30, 2025, amounting to PKR 318.6 billion, compared to PKR 361.5 billion in the same period last year. Despite the revenue decline, the company managed to improve its gross profit to PKR 11.03 billion from PKR 7.12 billion. Profit for the period increased slightly to PKR 3.45 billion from PKR 3.28 billion. Earnings per share (EPS) also saw a marginal increase, rising to PKR 5.43 from PKR 5.18.

📌 Key Takeaways

• 📉 Revenue inclusive of tariff adjustment decreased by 11.87% YoY, from PKR 361.51 billion to PKR 318.60 billion.
• 💰 Gross profit increased significantly by 54.78% YoY, from PKR 7.12 billion to PKR 11.03 billion.
• 💸 Other income decreased by 34.77% YoY, from PKR 12.34 billion to PKR 8.05 billion.
• 📊 Operating profit decreased by 19.15% YoY, from PKR 15.74 billion to PKR 12.74 billion.
• 🧾 Finance costs decreased by 33.12% YoY, from PKR 9.78 billion to PKR 6.54 billion.
• 👍 Profit before income tax increased by 3.95% YoY, from PKR 5.97 billion to PKR 6.20 billion.
• ✅ Profit for the period increased by 4.98% YoY, from PKR 3.28 billion to PKR 3.45 billion.
• ⭐ Basic and diluted earnings per share increased by 4.83% YoY, from PKR 5.18 to PKR 5.43.
• 💵 Cash generated from operations decreased from PKR 32.92 billion to PKR 14.28 billion, a 56.63% decrease.
• 🏢 Payments for property, plant, and equipment decreased from PKR 6.82 billion to PKR 5.88 billion, a 13.78% decrease.
• 🏦 Repayment of long term financing from financial institutions decreased from PKR 2.78 billion to PKR 2.63 billion, a 5.4% decrease.
• 🏦 Cash and cash equivalents at the end of the period were PKR -147.5 billion, compared to PKR -100.86 billion, representing a 46.2% decrease.
• ⚠️ Trade debts increased significantly from PKR 181.17 billion to PKR 240.34 billion, a 32.66% increase, indicating potential issues with collections.
• 👍 Total equity increased from PKR 70.65 billion as of June 30, 2025, to PKR 74.09 billion as of September 30, 2025.

🎯 Investment Thesis

HOLD. While SNGP demonstrated improved gross profit and EPS, the decline in revenue and operating cash flow raises concerns. The increase in trade debts is also a red flag. A HOLD recommendation is appropriate until there is more clarity on the company’s ability to sustain profitability and manage its cash flow effectively. The company faces significant financial risks and collection challenges. Further monitoring of performance is necessary before a more definitive investment decision can be made.