GAIL Q1 net profit down 32% to Rs 424.14 cr on lower realization

India's state-owned gas utility GAIL (India) Ltd today reported a 32% slump in net profit for the quarter ended June 2015 on lower production and price realization. The hit to profitability came even as it was exempted from sharing the subsidy burden of Oil Marketing Companies (OMCs).

GAIL (India) reported a net profit of Rs 424.14 crore during the quarter as compared to Rs 621.44 crore during the same period last financial year (2014-15). Total income of the company also declined 6.6% to Rs 12,643 crore from Rs 13,544 crore in the corresponding quarter last fiscal.

"The decrease in profit was mainly due to lower price realization of Liquefied Petroleum Gas (LPG), other liquid hydrocarbons and petrochemicals and reduced production of LPG, petrochemicals due to shutdown in Pata petrochemical plant, increased interest and depreciation charges after commissioning of petrochemical expansion," the company said in a statement.

The government had exempted upstream firms including Oil and Natural Gas Corp (ONGC), Oil India (OIL) and GAIL from bearing the burden of sharing under-recoveries of OMCs on subsidized sales of products in the June quarter on account of lower crude prices. GAIL had to pay Rs 500 crore in subsidy sharing burden in the first quarter last fiscal.

The company said revenue from natural gas transmission rose 40% to Rs 925 crore between April and June 2015 but the revenue from natural gas sales dropped to Rs 10,581 crore from Rs 11,669 crore in the corresponding quarter. Also, revenue from petrochemical business nearly halved to Rs 516 crore as against Rs 993 crore in April-June of previous year. Revenue from LPG transmission business rose 23% to Rs 136 crore.

GAIL transported 87.48 million standard cubic meters per day of natural gas during the quarter as opposed to 96.91 mmscmd in the year ago period. Polymer production halved to 51,000 tonnes while other liquid hydrocarbons' output fell to 278,000 tons from 327,000 tonnes in first quarter last fiscal.