Petronet LNG: Net Tumbles, Pushing Hard To Curtail Kochi Facility Losses
Amit Bhanot / 02 May 2014
Petronet LNG posted an off the target Q4 result. The company reported a 31% decline in its fourth quarter net profit of Rs 169.3 crore as against Rs 245.14 crore earned during the same fiscal last year.
Lack of pipeline infrastructure in south India is hitting below the belt to India’s largest LNG importer Petronet LNG. Due to negligible capacity utilization coupled with lower off take of LNG from Dahej terminal company’s bottom line tumbled to Rs169.3 crore during Q4FY14 as against Rs 245.14 crore earned during same time last fiscal, a whooping decline of 31%. In fact due to interest and depreciation of Kochi facility, company has lost Rs 230 crore during last 6 months and if this condition continues long then the company is slated to lose around Rs 400 crore per year.
“The situation is quite grim for the company as far as Kochi facility is concerned and also the capacity utilization during Q4 dropped to just 1% as FACT has also stopped taking LNG from the terminal during Q4,” informed A K Balyan, MD and CEO Petronet LNG. “Considering this we are planning to give this facility on rent to some national and international parties for time being so that capacity utilization can be improved. Some parties have shown interest in this and in the coming days something would be finalized and we are hopeful that we would be able to utilize 15-20% of capacity,” he added.During Q4 company’s turnover has increased from Rs 8487.86 crore in Q4 FY13 to Rs10458.55 crore, an increase of 23%. This increase is mainly due to increase in LNG cost as well as depreciation in rupee as against the dollar. On the capacity utilization, Dahej terminal processed 489 TBTUs during the whole year representing 96% of the capacity but due to sluggish demand of LNG in the country it has declined by 6% over previous year. “Though demand of LNG remained low in the recent past but now we are hopeful that it will pick up as there is some softening in the prices of LNG as well as some sectors already showing revival,” marked Balyan.
Company is also augmenting 5 MMTPA of capacity at its Dahej facility and for the same PMC contract has been awarded to EIL. This expansion will be completed by November 2016. Company’s board has also recommended a dividend of Rs 2 per equity share. Further work on company’s third LNG terminal of the capacity 5MMTPA proposed at Gangavaram in Andhra Pradesh is progressing satisfactorily as Ministry of Environment & Forests, Government of India has given all necessary clearances. Now state government approval is awaited.
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