The Hindu Business Line : GAIL net dips 30% on lower price realisations from petrochem, liquid hydrocarbons

New Delhi, Oct. 28 GAIL (India) Ltd has reported a 30 per cent drop in net profit for the second quarter of the current fiscal due to lower price realisations in petrochemicals and liquid hydrocarbons business.

GAIL’s net profit for the second quarter of financial year 2009-10 was Rs 713 crore against Rs 1,023 crore in the corresponding period previous year.

Speaking to mediapersons after the board meeting, Mr B.C. Tripathi, Chairman and Managing Director, GAIL said, “The decrease in net profit during the second quarter even after increase in turnover was mainly due to lower production and lower price realisation of polymers and liquid hydrocarbons. GAIL has also shared Rs 459 crore towards LPG and kerosene subsidy during the quarter compared with Rs 401 crore during the corresponding quarter last fiscal.”

The revenues from petrochemicals business were Rs 616 crore (Rs 627 crore). The revenues from LPG and liquid hydrocarbons business during the second quarter were Rs 515 crore (Rs 1,065 crore).

However, the turnover stood at Rs 6,202 crore in the second quarter (Rs 6,129 crore). The gross margin was Rs 1,187 crore in the second quarter (Rs 1,661 crore). Revenues from natural gas transmission business during the quarter have increased by 39 per cent to Rs 843 crore and natural gas trading by 11 per cent to Rs 4,969 crore.

For the first half of the current fiscal, GAIL has registered a turnover of Rs 12,224 crore, a 3 per cent increase over the turnover in the corresponding period during the last financial year. The company’s net profit for the period stood at Rs 1,369 crore (Rs 1,920 crore).

Bonds issue

GAIL will raise Rs 500 crore through a bond issue with greenshoe option by early December, Mr Tripathi said.

“Our board has approved raising of funds from the market and we will issue bonds for Rs 500 crore with greenshoe option of 50 per cent,” he said, adding that the money would be used for meeting its project commitments.

The company has projects worth Rs 15,000 crore at different stages of implementation.

Consultant appointed

GAIL has appointed Spanish consultant Marcados Energy Market Pvt Ltd to study the feasibility of uniform gas price regime. Mr Tripathi said that the consultant report is expected by January first week.

GAIL was asked by the Petroleum and Natural Gas Ministry to undertake a study on the feasibility of such a proposal, including the legal and technical issues, which will require to be addressed in case of a uniform price.