Shares of State-run Gail (India) Ltd fell over 6.6% today to Rs 365.30, their lowest intraday level since 14 February 2017, on the back of poor Q4 results announced yesterday. Gail (India) reported its results for the quarter ended March 31, 2017, on Monday. The company reported a 69% year-on-year (YoY) decline in its net profit for the fourth fiscal quarter of FY17 (Q4FY17), to Rs 260 crore from Rs 832 crore.
“The fall in net profit was due to impairment of investments of Rs 783 crore in the Ratnagiri Gas and Power Pvt Ltd. The quarterly profit without the impact of the above impairment is Rs 1,043, which is higher by 25% on YoY basis,” GAIL (India) said in a release.
Gail said it has an investment amounting to Rs 974.31 crore in Ratnagiri Gas and Power Pvt. Ltd (RGPPL), a joint venture with NTPC, which has initiated the process of the demerger of its business into two separate companies.
“In compliance of Ind AS 36, on impairment of assets, Gail and NTPC carried out an assessment of impairment of investment in RGPPL as on 31 March considering the restructuring of the business. Accordingly, a provision of Rs783 crore has been made,” the company said.
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Net sales of the company during the quarter under review grew 15.7% at Rs 13,422 crore against Rs 11,596 crore in the corresponding quarter of previous year. Net income rose 16% to Rs 13,674 crore from Rs 11,802.40 crore in the fourth quarter of last fiscal, as revenue from petrochemicals rose 57% to Rs 1,766 crore and that from natural gas marketing increased 12.7% to Rs 10,370.56 crore. Earnings before income, tax, depreciation and amortization (EBITDA) or operating profit for the quarter rose 27% to Rs 1,525 crore. EBITDA margin for the quarter stood at 11.4%. The company declared a dividend of Rs 2.7 per share.
Earlier, the company had announced that it has signed a first-ever time-swap deal to sell some of its US liquefied natural gas (LNG). Chairman and Manging Director B C Tripathi said the company is to receive LNG from its shale gas project in the US from March next year. It has, however, time swapped some of the supplies.
“We imported 55 cargoes of LNG on short or medium term contracts in 2016-17. This equals to under 4 million tonnes of LNG in a year. This volume we expect to replace from our US portfolio,” Tripathi said.