Dana Gas profit rises

Posts Dh181 million net profit in second quarter

Dana Gas, 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.

Dana, which owns a 3-per cent stake in Hungarian group MOL, provided no new update on upcoming Islamic bond maturity.

"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 face the music and 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.

Dana shares fell 2.5 per cent on the Abu Dhabi bourse Monday ahead of the results. The stock has dropped 11 per cent year-to-date.

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