PLNG’s 2QFY17 net income at Rs 4.6 billion was well ahead of our estimate, primarily driven by robust volume growth to 189 tn BTUs (Dahej: 3.6 million tonnes, Kochi: 0.1 million tonne). We retain our positive view on the stock. We expect a material upgrade in our EPS estimates driven by continued high off-take of LNG volumes. Risk to escalation in re-gasification tariffs for RasGas contract is a key concern.
PLNG’s EBITDA at R7.3 billion (+13% q-o-q, +54% y-o-y) and net income at Rs 4.6 billion (+22% q-o-q, +82% y-o-y) was 23-36% above our estimates. The net income was also boosted by a sharp increase in other income to Rs 0.9 billion from Rs 0.5 billion in 1QFY17.
Re-gasification volumes increased to 188.9 tn BTUs from 168.1 tn BTUs in the previous quarter and 156.6 tn BTUs in 2QFY16, led by a sequential increase in spot and tolling volumes in 2QFY17. Tolling volumes increase to 60.7 tn BTUs from 50.1 tn BTUs in the previous quarter; spot volumes were also higher at 25.2 tn BTUs as compared to 12.8 tn BTUs. LNG import volumes at Dahej terminal increased to 184.4 tn BTUs (3.6 million tons) with robust utilisation at 109% on pro-rata capacity, post expansion from August 2016; Kochi utilisation remained low at 7%. GAIL’s award of contract for the Kochi-Koottanad pipeline section and ongoing tender for the Koottanad-Mangalore section should provide comfort on the pickup in volumes from Kochi terminal in 12-18 months.