Dana Gas PJSC, an oil and natural gas producer forced to restructure debt last year, said second-quarter profit fell 45 percent as selling prices declined and damage at a production unit in Iraq cut output.
Net income dropped to 100 million dirhams ($27 million) from 181 million dirhams in the same period a year ago, the company said in a statement to the Abu Dhabi stock exchange today. Revenue fell 12 percent to 389 million dirhams.
Dana Gas, based in the United Arab Emirates sheikhdom of Sharjah, changed terms of about $1 billion in Islamic bonds, or sukuk, last year after the Egyptian and Iraqi governments delayed payments for fuel sales. The global financial crisis and the company’s inability to find buyers for minority stakes in some of its fields also hampered efforts to refinance.
“We are pleased with these numbers and see continued improvement,” acting Chief Executive Officer Rashid Al Jarwan said on a conference call today. The company sees fuel sales rising in Iraq after a production facility started last month and may benefit from higher sale prices for gas in Egypt if the government raises the cost to industrial buyers, he said.
The shares fell as much as 4.7 percent and traded 2 fils, or 3.1 percent, lower at 62 fils as of 11:50 a.m. in Abu Dhabi, the U.A.E.’s capital and largest emirate. The average price for European benchmark Brent crude was 5 percent lower, at $107.88 a barrel, than in the first half of last year, contributing to the company’s more sluggish revenue even as output rose.
Production of oil, gas and other fuels increased 5 percent to an average of 61,700 barrels of oil equivalent per day in the quarter, Dana Gas said. The company resumed production of liquefied petroleum gas in the Kurdish region of northern Iraq after an explosion there halted output last year.
Dana Gas said it had cash balances of 792 million dirhams at the end of June, compared with 601 million dirhams at the end of 2012. The company said it was owed 2.47 billion dirhams for sales in Egypt and Iraq as of June 30. In the first half, it collected 203 million dirhams in Egypt and is still owed 960 million dirhams. In Iraq’s Kurdish region, Dana Gas collected 223 million dirhams and was owed 1.47 billion dirhams at the end of June.