PPL Trade Debts Are Climbing Again After a Brief Pause
Pakistan Petroleum Limited’s latest accounts show a familiar problem returning. Trade debts are building once more, even as the company reports a much stronger June quarter.
Gas sales in the latest quarter were about PKR 41 billion. Trade debts still rose by roughly PKR 12 billion. That is close to 30 percent of the gas sold during the period.
The same pattern appeared in the March quarter. Two additions of that size in a row are not noise. They point to renewed pressure on collections and cash conversion.
2024 Looked Like a Turning Point. However, It Was Not
The ugly phase was 2023, when quarterly additions ran close to PKR 30 billion and the buildup exceeded 60 percent of gas sales. The one-year rolling average also remained near the top of the chart.
Then the line broke.
In the June and September 2024 quarters, PPL’s trade debts actually fell. The ratio of new debts to gas sales dropped below zero, while the rolling average fell from the mid-30s toward single digits.
That was the cleanest stretch in the series. It did not last.
The Ratio Has Reheated in 2026
A sharp spike returned in March 2025 before fading. From late 2025, however, additions started grinding higher again. By March and June 2026, the ratio of new debts to gas sales was back near 30 percent.
The one-year rolling average has also turned upward from its trough. It remains well below 2023 levels, which is the main comfort in the picture.
The underlying issue is not a sudden jump in gas sales. PPL’s gas sales have remained reasonably stable. The problem is that a larger portion of each quarter’s sales is staying on the balance sheet instead of being converted into cash.
PPL’s Trade Debts Reflect a Wider Circular Debt Problem
PPL’s exposure is closely tied to Pakistan’s broader gas-sector payment chain. The company’s accounts show that trade debts include receivables from government-owned power generation companies, independent power producers and Sui Southern Gas Company. Earlier accounts also highlighted the dependence of recoverability on the eventual settlement of inter-corporate circular debt.
That backdrop remains important. Pakistan’s gas-sector circular debt reached about PKR 3.61 trillion by June 2026, highlighting the liquidity pressures running through the energy supply chain.
Profits and Dividends Do Not Settle the Cash Question
June-quarter profit after tax jumped to PKR 37.4 billion, helped by an effective tax rate of 10.4 percent. The full-year payout rose to PKR 12 a share.
Those figures sit on top of a receivables trend that is no longer improving.
In Pakistan’s gas chain, billed sales to utilities and cash received are different things. Strong accounting earnings can coexist with a weaker cash-conversion picture when customers delay payments.
A 6 times earnings multiple and 0.76 times book already price in some of this risk. They do not remove it.
The PPL trade debts trend therefore deserves more attention than the headline earnings number. Until recoveries improve, the debt bars matter more than the earnings print.