Sui Southern Gas Profit Drop
Sui Southern Gas Profit Drop: Sui Southern Gas Company Limited (SSGC) has officially reported a major decline in profit for the quarter ended September 30, 2025. The latest financial results confirm a sharp earnings slowdown compared to the same period last year, mainly due to lower revenues, intense margin pressure, and a sharp rise in levy charges. The reported figures clearly show that the company faced significant operational and financial challenges during the quarter.
The company recorded a profit after tax of Rs785.1 million, showing an 84.9% decline compared to Rs5.19 billion in the corresponding quarter last year. Earnings per share also dropped sharply to Rs0.89 from Rs5.9, indicating reduced returns for shareholders. Compared to last year’s stronger financial position, the current quarter reflects weakened profitability and reduced efficiency across core operations.
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| Financial Item | Sep 2025 | Sep 2024 | Change |
|---|---|---|---|
| Net Profit | Rs785.1m | Rs5.19bn | -84.9% |
| Earnings Per Share | Rs0.89 | Rs5.9 | -84.9% |
| Net Revenue | Rs93.6bn | Rs117.21bn | -20.1% |
| Gross Profit | Rs750.8m | Rs5.04bn | -85.1% |
| Operating Profit | Rs5.3bn | Rs8.72bn | -39.2% |
Revenue Decline and Margin Pressure Impact Performance
Revenue from contracts with customers, mainly gas sales, declined by 23% year-on-year to Rs104.12 billion. At the same time, tariff adjustments fell by 41.4%, bringing net revenue down by 20.1% to Rs93.6 billion. This decline points toward lower sales volumes and pricing challenges faced by the company during the quarter.
Although the cost of gas sales decreased by 17.2%, gross profit still collapsed by 85.1% to Rs750.8 million. Gross margin contracted sharply to just 0.8% from 4.3% last year, showing severe margin compression. This drop in gross profitability became the main reason behind the overall decline in net earnings, outweighing the benefit of reduced costs.
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Main Reasons Behind the Profit Drop
- Net profit declined by 84.9% compared to the same quarter last year
- Gross profit dropped by 85.1% due to sharp margin compression
- Net revenue decreased by 20.1% because of lower gas sales and tariff adjustments
- Allowance for expected credit losses increased by 44.5%
- Total levy charges rose nearly 14 times, heavily impacting profitability
- Other Financial Highlights and Limited Relief Factors
- Other income increased by 20.5%, providing partial support to earnings
- Finance costs declined by 3.5%, offering minor relief
- Operating profit stood at Rs5.3 billion, though down 39.2% year-on-year
- Profit before taxation fell by 82% to Rs941.9 million
- Despite the sharp decline, the company remained profitable during the quarter
Conclusion
The confirmed profit drop of Sui Southern Gas highlights a difficult quarter marked by declining revenues, extreme margin pressure, higher credit loss provisions, and a sharp increase in levy charges. While higher other income and slightly lower finance costs helped reduce the overall impact, these factors were not sufficient to offset the weakness in core operations, resulting in a significant year-on-year decline in profitability.
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