State-run Petronet LNG reported a 13 per cent year-on-year growth in consolidated net profit at ₹819 crore in the April-June quarter of FY24 aided by better capacity utilisation measures.
The country’s largest liquefied natural gas (LNG) importer’s net profit on a sequential basis was higher by 32 per cent from ₹619 crore in Q4 FY23.
However, Petronet’s consolidated total income fell 18 per cent year on year and 16 per cent quarter on quarter to ₹11,801 crore during the June quarterr.
The company said that on a standalone basis, its net profit of ₹790 crore during Q1 FY24 is the highest during the first quarter of any financial year.
The company was able to achieve higher throughput and robust financial results due to better capacity utilisation of its terminals and efficiency in its operations, Petronet LNG MD and CEO AK Singh said at a press conference.
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Singh said the company is “seriously engaged” with Qatar for securing long-term contracts. Its current contract with Qatar ends in 2028 and the new contract has to be finalised in the current calendar year.
Under the long-term regasification contracts entered by the firm, the income towards ‘Use or Pay charges’ of ₹848.92 crore in FY23 for calendar year 2022 (₹415.91 crore in FY22 for calendar year 2021) has been recognised on account of lower capacity utilisation by its customers, Petronet said in its results filing with the BSE.
The balance confirmation against payment due/ advance adjusted is yet to be received. The management is confident that the payment would be recovered in due course, being a contractual obligation, it added.
Gas prices
On LNG prices, the Petronet chief said that currently, spot and long-term prices are in the range of $10-11 per million British thermal units.
“The price forecast for the next couple of months is the same, as China’s economic recovery is not going as expected and the gas reservoirs in the European Union (EU) are 86 per cent full against 67 per cent last year. Inventory with other high users such as Japan and Korea is also healthy,” Singh pointed out.
The expectation is that price volatility will not be there like last year. However, during the winter months there can be some price volatility, he projected.
Operational metrics
During Q1 FY24, Patronet’s Dahej terminal processed 217 trillion British thermal units (tBtu) of LNG as against 172 tBtu during the previous quarter ended March 31, 2023, and 196 tBtu during the corresponding quarter ended June 30, 2022, witnessing a growth of 26 per cent and 11 per cent, respectively.
The Dahej terminal witnessed a capacity utilisation of 96 per cent in the current quarter, as against 76 per cent in the previous quarter and 87 per cent in the corresponding quarter.
The overall LNG volume processed in Q1 FY24 was 230 tBtu, as against the LNG volume processed in the previous and corresponding quarters, which stood at 185 tBtu and 208 tBtu, reporting growth of 24 per cent and 11 per cent respectively.