Sharjah-based Dana Gas on Monday revised down its financial results for 2016 to a net loss of Dh323 million from a previously reported net profit of Dh121 million.
In a statement posted to the Dubai bourse website, Dana Gas attributed the revision in financials to its arbitration case with the Kurdistan Region of Iraq (KRG), which will result in a one-time adjustment of $121 million (Dh444).
Earlier this month, the company reported Dh121 million in net profit for 2016, which included its share of interest on overdue receivables from the KRG standing at $188 million as of December 31, 2016.
This amount was based on Pearl Petroleum Company’s (PPCL) — in which Dana Gas is a 35 per cent shareholder — financial statements, which reflected Dana Gas cost incurred on its sukuk of 9 per cent profit share.
“As part of the Third Award received on February 13, 2017, the Tribunal ruled that PPCL was instead entitled to interest on overdue receivables at Libor plus 2 per cent compounded monthly,” the company said in its statement.
It added: “Cumulatively as at December 31, 2016, Dana Gas had over the past two years booked its share of total interest receivable of $188 million, which related to the period 2008 to 2016. However, following the Third Award, the total interest allowed by the ruling in now $67 million.”
The company further stated that the $121 million adjustment to the financials is a “book entry that does not have any impact on the company’s actual cash flow for 2016 now on its cash balance as already reported.”