LPG pulls down GAIL net 7%

However, in much-needed relief for the company, govt decides to reduce its share of subsidy burden by 48%

Losses in the liquefied petroleum gas (LPG) business saw GAIL India’s net profit fall seven per cent to Rs 916 crore for the quarter ended September 2013, compared with Rs 985 crore in the corresponding period last year.

Providing much-needed relief to the company, the government has decided to reduce its share of subsidy burden by 48 per cent. “The Ministry of Petroleum has already communicated to us our share of the subsidy burden would be capped at Rs 1,400 crore,” said chairman B C Tripathi. In 2012-13, the company’s share of the subsidy burden was capped at Rs 2,687 crore.

As the company has already shared its part of the subsidy for this financial year, it wouldn’t have to pay any subsidy in the coming quarters.

The company said in the September quarter, losses on the LPG front stood at Rs 377 crore. Though the price realised on the sale of LPG was 19 per cent higher---Rs 50,000 a tonne---the segment suffered a loss, as the company had to pay Rs 700 crore as part of fuel subsidies.

For the September quarter, the company’s turnover rose 23 per cent to Rs 13,945 crore, against Rs 11,361 crore in the year-ago period. Sales from natural gas trade increased 28 per cent to Rs 12,378 crore, against Rs 9,697 crore in the corresponding period last year.

Revenues from the company’s transmission business rose eight per cent to Rs 1,067 crore from Rs 984 crore in the year-ago period. Net sales from the petrochemicals business stood at Rs 1,134 crore, a rise of 29 per cent compared with Rs 880 crore in the corresponding period last year.

In volume terms, natural gas sales stood at 78.58 million standard cubic metres a day (mscmd), against 80.7 mscmd in the corresponding period last year; transmission was 95.21 mscmd, against 105.64 mscmd. LPG transmission during the September quarter fell to 729 thousand tonnes, against 813 thousand tonnes in the year-ago period.

“GAIL’s net sales and net profit were above our estimates due to better-than-expected performance from its natural gas trading segment. Looking ahead, our concerns on lower utilisation of GAIL’s pipelines remain,” said Bhavesh Chauhan of Angel Broking

Meanwhile, the company on Friday said it had sold more than a fourth of its 4.6 per cent stake in Hong Kong-listed city gas distribution firm China Gas Holdings for Rs 385 crore. Tripathi said of the 210 million shares acquired in China Gas in 2005, the company had sold 60 million for Rs 137 crore.