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State-run GAIL (India) on Friday reported a 55 per cent drop in its consolidated net profit at ₹1,305 crore for the July-September quarter this fiscal year due to lower gas sales on account of supply disruptions from a former unit of its Russian supplier, Gazprom.
On a sequential basis, the decline in net profits was steeper. It fell 60 per cent from ₹3,251 crore in Q1 FY23.
GAIL’s consolidated income rose 77 per cent y-o-y to ₹38,970 crore in Q2 FY23. On a quarter-on-quarter basis, GAIL’s total income rose marginally by 2.5 per cent from ₹38,033 crore in Q1 FY23.
GAIL CMD Sandeep Kumar Gupta said the company has incurred a capex of around ₹3,970 crore during the current half year, mainly on pipelines, petrochemicals, equity to JVs, etc., which is 53 per cent of annual target.
GAIL has been declared as a successful Resolution Applicant by the Committee of Creditors for acquiring JBF Petrochemical through Corporate Insolvency Resolution Process. With this, the company will further expand its presence in the southern part of the country, he added.
Pursuant to the approval of shareholders, the company has issued bonus shares in September 2022 in the ratio of one equity share of ₹10 each for every two existing equity shares of ₹10 each. Accordingly, Earnings Per Share has been restated for all comparative periods presented as per Ind AS 33, it added.
Gas sales decline
During the quarter, natural gas transmission volume stood at 107.71 million standard cubic meters per day (MSCMD) in Q2 FY23 as against 109.47 MSCMD in Q1 FY23.
Gas marketing volume stood at 92.54 MSCMD as against 100.84 MSCMD in the previous quarter (Q1 FY23). Liquid Hydrocarbon (LHC) sales stood at 231 thousand tonnes (TT) as against 220 TT and Polymer sales stood at 108 TT as against 109 TT in comparison with the previous quarter.
“Due to the ongoing geopolitics, there has been disruption in Liquified Natural Gas (LNG) cargo supplies by one of the company’s long-term LNG suppliers. The company has taken various measures which includes reduction of supplies to downstream customers and its internal consumption at Pata petrochemical plant by reducing petrochemical production to have sustainable operation,” GAIL said in a regulatory filing on stock exchanges.
In 2012, GAIL inked a 20-year deal with Gazprom to buy 2.85 million tonnes (mt) LNG. The supplies commenced six years later and was to reach full volume in 2023. Gazprom Marketing and Trading Singapore (GMTS) had signed the deal on behalf of Gazprom. GMTS was moved to Gazprom Germania and in early April, Gazprom gave up the ownership of the German unit. Subsequently, the former Gazprom unit defaulted on LNG supplies to India.
To counter this, last month, GAIL signed a memorandum of understanding (MoU) with Abu Dhabi National Oil Company (ADNOC) to explore collaboration opportunities in LNG supply and decarbonisation, including short- and long-term sales agreements.
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