PMT gas boosts Gail profits

GAIL, India’s largest natural gas transporter and marketer, reported a 31% jump in its net profit to Rs 897 crore for the quarter ended June 2008. The supply from Panna-Mukta-Tapti (PMT) fields boosted Gail’s performance in this quarter.
Gail was appointed the government’s nominee since April 2008 to market 17.3 million cubic metres a day (mcmd) gas produced from these western offshore fields. On the other hand, high petroleum prices helped the company’s LPG and petrochemicals segments perform better.
Gail’s subsidy burden for the quarter jumped 43% to Rs 388 crore compared to the corresponding quarter of the previous year, however, it remained stagnant over the immediate preceding quarter.
Thanks to the availability of additional gas, Gail’s natural gas sales jumped 17.2% to 79.81 mcmd during the June quarter while the natural gas transmission volumes grew 7.4% to 84.48 mcmd.
This helped the natural gas trading business to post 284% jump in earnings to Rs 95 crore. The growth in the transmission business was lower at 18% to Rs 433.7 crore.
The soaring prices of petroleum products helped the petrochemicals and LPG businesses to post healthy growth figures despite stagnating volumes. LPG and liquid hydrocarbons sales volumes dipped 2.3% to 3,46,000 tonne during the quarter as Gail had to shutdown its Vijaypur plant for around 15 days for maintenance. The profit in this segment reported a 60% jump on the back of just 25% growth in sales.
Similarly, the growth in PBIT (profit before interest and tax) for the petrochemicals division was higher at 28% compared to the sales growth of 20%. The sales volumes of polymers were down 1% at 1,04,000 tonnes.
Gail reported a 35% growth in net sales at Rs 5,731 crore with operating profit margins staying flat. Other income jumped 26%, while interest and depreciation charges stagnated.
The resultant pre-tax profits were 40% higher on year-onyear basis. However, as the effective rate of tax rose to 33.7% from 29.3% earlier, Gail’s net profit grew by 31% to Rs 897 crore.