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GAIL Q2 net profit down 46% on higher prices, Russian gas disruption

State-run Fuel Authority of India (GAIL) on Friday reported a 46 per cent drop in web revenue throughout the second quarter (July-September), as greater international and disruption in provide from Russian big Gazprom damage enterprise.

Web revenue stood at Rs 1,537.07 crore within the July-September quarter in comparison with Rs 2,862.95 crore in the identical interval a 12 months again. The revenue was sequentially down 47.2 per cent from the Rs 2,915.19 crore determine within the April-June quarter.

Whereas was down 59.4 per cent quarter-on-quarter, margins slipped to 4.6 per cent within the second quarter of the present fiscal from 11.6 per cent within the earlier April-June quarter. Income from operation was up 79 per cent to Rs 38,390.89 crore.

Gazprom Advertising and marketing and Buying and selling Singapore (GMTS), now a subsidiary of Gazprom Germania, stopped delivering LNG to below a long-term contract in late Might, Director (Finance) R Ok Jain mentioned after the had been introduced.

Again in 2012, Gazprom’s former subsidiary, Gazprom Advertising and marketing and Buying and selling Singapore (GMTS), had signed a 20-year contract to provide with 2.85 million tonnes of LNG a 12 months. Provides below the deal had began in 2018 and the complete quantity was anticipated to be reached in 2023.

However earlier this 12 months, GMTS acquired housed below Gazprom Germania GMBH, after which Gazprom gave up its possession of the corporate in April with none clarification, and imposed sanctions. Because the diplomatic fallout of the Ukraine warfare escalated, Germany seized management of Gazprom Germania in April.

Up to now, GMTS has defaulted on the availability of 17 cargoes or shiploads, together with 13 within the second quarter (July-September), he mentioned. To mitigate disruption within the provide of 8.5-9 million commonplace cubic meters per day or roughly 20 per cent of all gasoline provide, GAIL needed to lower provides to fertiliser vegetation in addition to some industrial shoppers, he added.

It additionally lowered the gasoline provide of its Pata petrochemical plant in Uttar Pradesh by as a lot as 3 mmscmd, resulting in the plant working at simply 40 per cent of the capability, he famous. This lowered capability and decrease petrochemical costs damage earnings from the enterprise.

It posted a pre-tax lack of Rs 346.22 crore within the petrochemical enterprise in Q2, in comparison with a Rs 363.29 crore loss a 12 months again and Rs 35.16 crore loss in April-June 2022.

GAIL made up a number of the volumes misplaced by shopping for LNG from the spot market, the place costs are greater than the long-term deal which damage advertising margins, Jain pressured.

Robust occasions

In an emergency bid to safe secure Liquefied Pure Fuel (LNG) provide, GAIL has sought to expedite talks on short- and long-term provide agreements with the Abu Dhabi Nationwide Oil Firm (ADNOC).

The pact explores collaboration alternatives in LNG provide, decarbonisation, and future gross sales. As much as 55 per cent of India’s native gasoline demand is met by way of imports. Then again, whereas gasoline meets solely 6.2 per cent of India’s wants, the Centre has been planning to boost this determine considerably, as a way to cut back the dependence on petroleum.

GAIL’s mainstay pure gasoline advertising enterprise noticed revenues double however profitability declined 66 per cent. Larger gasoline costs, ensuing from a world surge in charges following Russia’s invasion of Ukraine damage margins, the corporate mentioned.

GAIL mentioned it transported 107.71 million commonplace cubic metres per day of pure gasoline in Q2 (July-September), down from 109.47 mmscmd within the earlier quarter. Fuel advertising volumes additionally dropped virtually 8 per cent to 92.54 mmscmd.

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