Petronet LNG March Quarter Earnings Review

State PSU Petronet LNG has reported 18 per cent rise in net profits to Rs 245.12 crore for quarter ended March 2012 as against Rs 206.27 crore in the corresponding quarter of the previous year. However on a sequential basis the company’s net profit has declined by 17 per cent from Rs 295.39 crore in the December 2011 quarter. This decline in quarterly profits was mainly due to a drop in volumes as a result of lower off-take from fertilizer manufacturers who themselves have seen a contraction in demand due the cyclical nature of their business environment. 

The total volumes fell to 13.6 British Thermal Unit (BTU) from 14.5 BTU in December 2011. It is believed that a steep fall in marketing margins have also impacted the company’s performance this quarter.

On a full year basis though the company has performed exceptionally well as its FY12 topline and bottomline rose stupendously by 72 per cent and 71 per cent to Rs 22,696 crore and Rs 1,057 crore respectively as compared to its FY11 figures. The overall margins have however been impacted as the EBIDTA margins fell by 126 bps to 8.06 per cent for the full year due to rise in cost of contracted LNG imports.

During the quarter ended March 2012, the total utilization rate for Petronet LNG at its Dahej terminal was 108 per cent, lower than the 114 per cent utilization rate seen in December 2011. For the complete year the utilization rates stand at 110 per cent. On the operating level for the March 2012 quarter, the blended EBIDTA stood at Rs 31.1 per mmbtu as against Rs 35.04 per mmbtu in December 2011. The PAT per mmbtu came at Rs 18 per mmbtu from Rs 20.37 per mmbtu in Dec 2011.

We still await further clarity from the management on the company’s capex plans for its Dahej and Kochi LNG terminals. We shall also take our final call on the counter post our interaction with the management on marketing margin trajectory and the overall demand scenario.