(MENAFN - Khaleej Times) Dana Gas Company, which has a 1 billion Islamic bond maturing in October, on Monday said its quarterly profit rose 46 per cent helped mainly by lower income tax expenses.
Abu Dhabi-listed Dana, which has operations in the UAE, Egypt and Kurdistan, posted second-quarter profit of Dh181 million (49.28 million), up from Dh124 million in the year-ago period, it said in a bourse statement.
Quarterly revenue fell 12 per cent to Dh554 million from Dh627 million last year, hurt by lower hydrocarbon prices and a decline in production in Egypt, Dana said.
Two analysts forecast profit of Dh183 million and Dh151 million for the second quarter, in a Reuters poll. Income tax expense for the quarter fell by nearly half to Dh51 million from Dh97 million a year ago, boosting profitability at the Sharjah-based energy firm.
"We have achieved our revenue estimates for the first half and posted strong net profit figures of Dh387 million. Our revenue collections were in line with expectation and we continue to have constructive discussions with both the Government of Egypt and the Government of the Kurdistan Region of Iraq on payment of the company's receivables. Overall this has been a reasonable six months financially and we look forward to the rest of the year with renewed confidence," Dr Adel AlSabeeh, chairman of Dana Gas, said.
Consensual solution for 1b sukuk
Dana Gas PJSC said it's committed to find a "consensual solution" on a 1 billion Islamic bonds maturing in two months as its trade receivables increased.
"The company is committed to finding a consensual solution that is equitable to all stakeholders," Dana said in a statement to the Abu Dhabi stock market. "The company will provide further updates as further progress is made."
The yield on its 7.5 per cent notes maturing October 31 has soared this year on concern about Dana Gas's ability repay and after its biggest shareholder, Crescent Petroleum Company, said it has no plan to provide cash to the gas producer. The notes slumped to 70.12 cents to the dollar today, lifting the yield to a record 217 per cent, according to data compiled by Bloomberg.
"Investors want to know how the company is going to repay its 1 billion sukuk that matures in a matter of weeks, and in that regard the company has provided no further information," said Chavan Bhogaita, head of markets strategy department at National Bank of Abu Dhabi.
The natural gas producer appointed Blackstone Group and Deutsche Bank as advisers to help it weigh options for the outstanding 920 million on the convertible sukuk and said it was committed to finding a consensual solution. Depending on the outcome of discussions, the company could become the first in the UAE to restructure a bond. "In the not too distant future, the company is either going to have to sit at the negotiating table with investors, or come up with the cash with which to pay this debt," Bhogaita said.
Dana started facing problems last year after anti-government protests in countries such as Egypt led to payment delays from government entities. It has also faced payment issues in Iraq's Kurdistan region.
The company had cash balance of Dh601 million as of June 30, 2012, it said on Monday.
"We have maintained strong levels of net production in the first half of the year. Good progress is being made on our drilling programme in Egypt, with one new field discovery (the West Al Baraka Field) in the South of the country," Ahmed Al-Arbeed, chief executive officer of Dana Gas, said.
"We plan to drill further exploration and development wells in Northern Egypt. I am also pleased to report that the commissioning and start-up of the Natural Gas liquids plant in Ras Shukheir (Egypt) is advancing well and should be operational in H2 of this year," he added. Dana shares fell 2.5 per cent on the Abu Dhabi bourse on Monday ahead of the results. The stock has dropped 11 per cent year-to-date.
With input from agencies