Petronet LNG’s Net Declines 17%

Owing to the low margins on imports and internal cost structure, the net profit of Petronet LNG has declined by 17% in Q1 to touch Rs 225 crore against Rs 271 crore during Q1FY13. The company has shown a decent performance on the revenue front due to a rise in volumes and prices of LNG as it climbed to Rs 8444 crore, marking growth of 20% over the corresponding quarter last year. During this period, the company operated at 102% capacity at its Dahej Terminal, its sole operational facility with a capacity of 10 MMTPA.

Due to an increase in the prices of LNG in the international markets, the company is witnessing subdued demand from domestic consumers. “There is certainly some slackening in demand as prices of LNG have spurted and consumers like fertiliser manufacturers and other industries don’t seem very enthusiastic about this but I hope the demand scenario will improve in the second quarter of this fiscal”, informed A K Balyan, MD & CEO, Petronet LNG.

Going forward, the company is also working on the expansion of the Dahej Terminal by 5 MMTPA and the contract will be awarded in the next few months. “We are going to incur a capex of Rs 3000 crore on this terminal and a term loan agreement of Rs 2250 crore has already been signed with banks”, Balyan added. In addition to this, the company has almost completed work on the green-field Kochi Terminal and will be commissioned by August 2013. In the first year, the capacity utilisation of this plant would be low as there is no pipeline infrastructure but Petronet had requested GAIL to provide the infrastructure as soon as possible.

It also has a plan to construct a terminal of 5 million tonnes capacity on the east coast at Gangavaram, Andhra Pradesh, for which the environmental clearance is expected to come in by October 2013 and it will take three years from there for the project’s completion.

On ADB’s strategic stake of around 5.2% in the company, Balyan said, “Many companies have shown interest in purchasing this stake, including Qatar Petroleum, some players in gulf, a few big funds along with some domestic companies. It is up to ADB to decide”. Also, as there is a nominee of ADB in the board, the future buyer may ask for the same position in the board, he further added.