State-owned gas utility GAIL India Ltd Monday reported its highest-ever net profit, record dividend payout and largest-ever capital expenditure of Rs 54,000 crore as it builds infrastructure to take clean fuel to unconnected parts of the country to aid transition to a gas-based economy. The country’s biggest transporter and marketer of natural gas reported that net profit rose 10 per cent in the fourth quarter to Rs 1,122 crore and by 30 per cent to record Rs 6,026 crore in the financial year ended March 31, its Chairman and Managing Director B C Tripathi told reporters here.
GAIL Board recommended a final dividend of Rs 1.77 per share to take total dividend payout to highest ever of Rs 8.02 per share in the fiscal, he said. “The year saw highest-ever capex (capital expenditure) spending in a single year of Rs 8,344 crore and we are investing another Rs 54,000 crore over the next 2-3 years in laying of gas pipeline network that will feed households and industries such as fertiliser plants,” he said.
GAIL’s investment is critical to realising the government objective of raising the share of natural gas in the energy basket to 15 per cent by 2030 from the current 6.2 per cent and create a gas-based economy. Natural gas being a cleaner fuel will help cut carbon emissions and bring down vehicular pollution.
GAIL, which owns and operates 14,000-km of pipeline network in the country, is laying 6,000 km of new lines at a cost of Rs 32,000 crore to take gas to unconnected areas in the east and the south. Besides, it is investing another Rs 12,000 crore in city gas distribution networks to retail CNG to automobiles and piped natural gas to households in towns such as Varanasi and Patna.
Another Rs 10,000 crore will go into the expansion of petrochemical manufacturing capacity, he said adding the company is also helping revive shut fertiliser plants that will build self-sufficiency in producing crop nutrients. Currently, most of the gas pipelines in the country are concentrated in the western and northern part of the country. GAIL is now laying a pipeline upto Haldia in West Bengal and parts of Odisha and will extend it to the northeastern region. Also, it is laying pipelines in Kerala, Karnataka and Tamil Nadu.
Tripathi said net profit in fourth-quarter rose 10 per cent as margins on natural gas sales and transmission more than made up for the loss in the petrochemical business. Net profit in January-March at Rs 1,122.23 crore, or Rs 4.98 per share, was 9.92 per cent higher than Rs 1,020.92 crore, or Rs 4.53 a share, net profit in the same period of the previous fiscal year. Revenue rose to Rs 18,763.87 crore in the fourth quarter of the 2018-19 fiscal year when compared with Rs 15,430.69 crore net profit in the year-ago period.
GAIL had a segment loss of Rs 20 crore in its petrochemical business. Also, pre-tax profit on LPG and liquid hydrocarbons business halved to Rs 416.15 crore. This, however, was made good by higher margins on gas transmission and natural gas sales businesses. Pre-tax profit on gas transmission business rose 8.3 per cent to Rs 777.92 crore while that on natural gas marketing tripled to Rs 587.53 crore.
Tripathi said took a one-time impairment loss of Rs 326.33 crore on its US shale gas ventures and Dabhol power plant to reflect the true value of such investment. The company transported 107 million standard cubic metres per day of gas in the period under review as compared to 105 mmscmd in the same period of the previous financial year. Sale rose to 97 mmscmd from 85 mmscmd.
Its turnover in FY19 increased 39 per cent at Rs 74,808 crore. In fiscal year ending March 31, 2019, GAIL registered 14 per cent growth in natural gas marketing and 2 per cent growth in natural gas transmission volumes. Sale of petrochemicals rose 9 per cent.
“The increase in profit was mainly due to the robust performance of natural gas marketing segment duly supported by increase in profit from natural gas transmission, liquid hydrocarbons and petrochemicals segments,” he said.
GAIL Board approved a 1:1 bonus share – one free share for every one equity shares held. It also recommended a final dividend of Rs 1.77 per share on paid-up equity (pre-bonus issue) making the total dividend for the year to Rs 8.02 per share. Tripathi said GAIL will borrow Rs 5,000 crore in FY20 to fund its close to Rs 7,000 capital expenditure.