Dana Gas, embroiled in payments disputes with major customers, enjoyed a big rise in profits for the first half of the year.
The gas producer, based in Sharjah, reported first-half net profit increased by 79 per cent on the year to Dh387 million (US$105.3m). Revenues rose by 1 per cent to Dh1.2 billion and overall production declined by 7 per cent to 60,950 barrels of oil equivalent per day. The company attributed the rise in profit to increased production at its Kurdish assets and to higher prices for its product.
Dana's financial performance remains blighted by payments issues in Egypt and Iraqi Kurdistan, where most of its production assets lie.
"We continue to have constructive discussions with both the government of Egypt and the government of Kurdistan Ö on payment of the company's receivables," said Adel Al Sabeeh, Dana's chairman. Receivables out of Egypt have been intermittent since the government of Hosni Mubarak was toppled last year, while a dispute between the Kurdistan regional government and Baghdad has prevented payments.
Payment issues have also cut deeply into the company's cash flow, although the cash balance rose by 46 per cent to Dh 601m.
Concerns over Dana's finances hit the share price hard on fears it would not be able to repay a $1bn sukuk that matures in October.
Earlier this year, Crescent Petroleum, Dana's parent company, said it would not come to the rescue and Dana hinted the debt would be refinanced. Dana stock traded at 39 fils on the Abu Dhabi Securities Exchange yesterday.
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