Dubai: Sharjah-based Dana Gas has posted a four per cent growth in its net profit for the first half of 2018, as it announces the completion of its sukuk restructuring.
In a statement released on Tuesday morning, the company said that its first half net profit had increased year-on-year to $24 million (Dh88 million) and to $50 million (Dh183 million), a 117 per cent increase, when excluding the one off sukuk restructuring costs.
Dana Gas says that that the rearrangement of its sukuk had been finalised with the issuance and listing of a new Sharia-compliant bond.
“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,” it said.
Claiming changes in Islamic finance practice, Dana Gas declined to redeem its sukuk when they matured last year, on the basis that the instruments were no longer Sharia-compliant.
On a conference call with the press later in the day, Patrick Allman-Ward, chief executive of Dana Gas, said that he expected a decision to be made on the size of damages in its legal dispute with Iran’s national oil company, NIOC, by the end of October.
Elsewhere in the financial results, the company said it was on track with its initial debottlenecking project, which is expected to increase gas and condensate production on the Khor Mor field by 25 per cent in the third quarter of this year.
Drilling for appraisal and development of the Khor Mor and Chemchemal fields has begun, the statement 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,” said Patrick Allman-Ward, CEO of Dana Gas.
The reduction in the sukuk profit rate would improve the company’s financial position and ability to fund future dividends, he added.
“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…and underway with our larger expansion programme, which will deliver a production increase of 170 per cent by 2021.”
On an operating basis, gross profit increased by 39 per cent to $82 million (Dh300 million), which Dana Gas credits to improved price realisation and cost control.