Dana Gas, a leading regional natural gas company, has reported year-on-year net profit of $24 million for the first half (H1) of the year and $50 million, a 117 per cent increase, when excluding the one off Sukuk restructuring costs.

Net profit during the second quarter was $10 million, $2 million lower due to the one off Sukuk restructuring costs; however, excluding these, the Q2 net profit is $36 million (AED 132m), a 200 per cent increase year-on-year, a company statement said.

The Sukuk restructuring has delivered a 50 per cent reduction in Sukuk profit rate to 4 per cent, reducing annual debt service costs by an estimated 63 per cent. The saving represents a strong improvement in the company’s financial position and along with increasing operating cash flows provides the basis for the company’s planned annual dividend policy.

During 1H 2018, the company has made major strides in delivering its transformational expansion in the KRI.  The company is on track with its initial debottlenecking project which is expected to increase production by 25 per cent in Q3 of this year.  Moreover, drilling for appraisal and development of the Khor Mor and Chemchemal fields has begun.

KRI production is planned to increase by 170 per cent by 2021 through the installation of two 250 MMscf/d gas processing trains, increasing production of gas and condensate by 580 MMscf/d and 20,000 barrels per day respectively.  The KRG has paid regularly and on time and there are no current outstanding receivables.

The Sukuk restructuring has recently been completed with the issuance and listing of a new Sukuk.  The new Sukuk is a fair and consensual deal for the benefit of all our stakeholders and received over 90 per cent votes in favour from shareholders and sukukholders.  

Dr Patrick Allman-Ward, CEO of Dana Gas, said: “We have delivered a strong financial performance with profits up to $24 million and up to $50 million excluding one off Sukuk costs, a 117 per cent increase.  The reduction in the Sukuk profit rate will improve the company’s financial position and ability to fund future dividends.

“Operationally, it is an exciting time for the company.  This is especially so in the KRI where we are on track with our debottlenecking project, which is expected to increase production by 25 per cent in Q3, and underway with our larger expansion programme, which will deliver a production increase of 170 per cent by 2021.”

Revenue increased 6 per cent to $236 million as a result of higher realised prices mainly for condensate, which contributed $33 million to our top line, and helped offset a production decrease in Egypt and the UAE, which together had an impact of $19 million.

On an operating basis, gross profit increased by 39 per cent to $82 million due to improved price realisation and cost control.  Net profit increased 4 per cent year-on-year to $24million. This is principally the result of higher realised prices during H1 2018, partly offset by lower investment and finance income. Excluding the one off Sukuk restructuring costs, net profit for the period would be $50 million, a117 per cent increase year on year. – TradeArabia News Service