State-owned gas utility GAIL India on Monday reported 25 per cent drop in third-quarter net profit due to slump in margins on natural gas marketing as well as LPG and liquid hydrocarbons.
The net profit at Rs 1,250.65 crore, or Rs 2.77 a share, in October-December, was 25.6 per cent lower than Rs 1,681.23 crore, or Rs 3.73 per share, profit earned in the same period a year ago, the company said in regulatory filings.
Revenues from natural gas marketing fell 9.5 per cent to Rs 14,662.67 crore and segment profits dropped 31 per cent to Rs 466.52 crore. Revenues and profits from its core gas transmission business, however, continued to grow in double digits.
Also, the petrochemical business posted a loss of Rs 8.51 crore as compared to a pre-tax profit of Rs 29.71 crore a year ago.
Gas marketing pulled down the company's overall turnover to Rs 17,768.82 crore in the third quarter from Rs 19,788.98 crore in October-December 2018.
In a statement, GAIL said net profit was up 18 per cent quarter-on-quarter "mainly due to better physical performance, better margins in gas marketing and liquid hydrocarbons."
In the nine-month period ended December 2019, gross sales of Rs 54,021 crore were lower than Rs 56,101 crore in the corresponding period of last year. Net profit dropped 27 per cent to Rs 3,602 crore.
The drop in profit was "mainly due to a reduction in petrochemical and liquid hydrocarbon prices by around 22 per cent and 17 per cent, respectively," the statement said.
GAIL Chairman and MD Ashutosh Karnatak stated that the company had been able to achieve growth in profit in third quarter despite a significant decline in petrochemical prices.
"This has been due to better operational efficiency and physical performance in comparison to Q2 FY20 accompanied by an increased capacity utilisation of the petrochemical unit at Pata," he said.
GAIL, he said, is in step with the government's vision of expanding the share of natural gas to 15 per cent in the energy basket of India by working relentlessly in reshaping the gas economy of the country.
The company declared an interim dividend of 64 per cent or Rs 6.40 per share, for 2019-20.