SNGP Profit Surges 79.65%: Tax Implications for Investors

Sui Northern Gas Pipelines Limited (PSX: SNGP) reported a robust 79.65% surge in net profit to Rs18.98 billion for the fiscal year ended March 31, 2025, up from Rs10.56 billion, a performance with significant tax implications for stakeholders. For our clients, this highlights the need for strategic tax planning to manage increased tax liabilities and dividend distributions.

Earnings per share (EPS) soared to Rs29.92 from Rs16.66, and the board declared a final cash dividend of Rs7.50 per share (75% of paid-up capital), triggering withholding tax obligations under the Income Tax Ordinance. Total revenue grew 12.24% to Rs1.53 trillion, propelled by a 27.1% increase in gas sales revenue to Rs1.37 trillion, despite a 44.3% drop in tariff adjustments.

Gross profit rose 29.96% to Rs44.41 billion, supported by a 55.4% reduction in other expenses, while other income climbed 50.6% to Rs54.64 billion. Operating profit jumped 57.84% to Rs67.88 billion, despite a 39.7% rise in finance costs to Rs38.04 billion. Profit before income tax doubled to Rs21.81 billion, but a staggering 845% surge in income tax expenses underscores the importance of tax optimization for SNGP and its investors.

From a tax law perspective, clients must ensure compliance with Federal Board of Revenue (FBR) regulations on dividend withholding tax (typically 15% for filers) and assess deductibility of finance costs to mitigate tax exposure. Following the announcement, SNGP’s share price rose 2.5% to Rs151.20, outperforming the Pakistan Stock Exchange (PSX), reflecting market confidence but also potential capital gains tax considerations for shareholders.

Our firm advises clients to review tax obligations on dividends, optimize expense deductions, and prepare for capital gains reporting, ensuring alignment with evolving FBR guidelines.