Petronet LNG net profit slides 20% in Q4

Petronet LNG (PLL), India’s largest state-owned natural gas importer, on Tuesday posted a 20 per cent decline in net profit in the quarter ended March (Q4), on account of reversal of tax expenses that had jacked up profit in the corresponding quarter in financial year 2014-15.

The company reported a net profit of Rs 239 crore for Q4 compared to Rs 300 crore in the year-ago period. “The net profit figure of the quarter is not comparable with the previous year. However, profit before tax (PBT) figures are comparable,” R K Garg, director-finance at PLL, said during a conference call.

The company’s PBT jumped two-and-a-half times to Rs 351 crore in Q4 FY16 against Rs 130 crore a year ago. However, the slide in net profit came despite a 19 per cent reduction in expenses to Rs 5,698 crore compared to Rs 7,021 crore in FY15.

PLL’s total income in Q4 also dipped 15 per cent to Rs 6,065 crore as compared to Rs 7,161 crore a year ago. “Results were broadly in line with estimates with earnings before interest, tax, depreciation and amortisation (Ebitda) at Rs 440 crore, a growth of 44 per cent quarter-on-quarter, while profit after tax came in at Rs 240 crore, growing 34 per cent quarter-on-quarter,” equity research firm Emkay Global said.

For the whole of FY16, PLL’s net profit rose 3.6 per cent to Rs 914 crore, compared to Rs 882 crore in FY15. Total income dipped 31 per cent to Rs 27,303 crore from Rs 39,655 crore in FY15.  

PLL is jointly promoted by state-owned firms GAIL (India), Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and Bharat Petroleum Corp (BPCL). The firm operates a 10 million tonne per annum (mtpa) LNG terminal at Dahej in Gujarat and a five mtpa terminal at Kochi in Kerala with IOC, BPCL, GAIL and GSPC as key customers.    

PLL had earlier this year renegotiated its long-term contract with RasGas of Qatar for purchase of 7.5 million tonne LNG for 25 years, bringing down the price to less than $5 per million British thermal units (mbtu) from $12 per mbtu.

Petronet is currently working on a project to expand the Dahej terminal’s capacity by five mtpa at a cost of Rs 2,400 crore. The company said it has already spent around Rs 1,600 crore on the project and plans an additional spend of Rs 600 crore this financial year to ensure the project is completed by year-end.

The Dahej terminal processed highest-ever quantity of LNG in Q4 at 149 trillion British thermal units (tbtu) as compared to 138 tbtu a year ago. In FY16, the terminal processed 566 tbtu translating to capacity utilisation of 111 per cent. However, lack of pipeline connectivity impacted volumes at the Kochi terminal, which handled only 14 tbtu of LNG.     

Analysts said they were upbeat on the stock because of the pickup in long-term volumes, particularly after the RasGas contract renegotiation, expansion of Dahej terminal and likely solution to the issue of pipeline connectivity at Kochi. The company's share price on BSE was trading at Rs 281.10, up 1.6 per cent, at 13:42 hours on Tuesday.

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