Gail India Q2 profit up 179% on cost savings, petrochem
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New Delhi: Gail (India) Ltd on Tuesday reported an almost three-fold growth in profit for the September quarter on lower expenses and finance costs.
Net profit rose to Rs924.65 crore from a re-stated profit of Rs330.4 crore in the year earlier, the company said.
The company had reported a profit of Rs440.5 crore for September quarter of financial year 2015 under the Indian Generally Accepted Accounting Principles, which needed to be restated as part of a mandatory switching to new Ind- AS accounting norm.
In a statement, state-run Gail attributed the profit growth to better performance in natural gas transmission and petrochemical segments and to a reduction in costs.
During the quarter, Gail posted a 15% decline in sales to Rs12,058 crore. However, revenue from petrochemical business grew 53% to Rs1,358 crore and profit from this business stood at Rs155 crore in the September quarter compared to a loss of Rs238 crore in the same period a year ago.
Natural gas marketing volume improved by 8% and transmission volume grew by 12%. Income from gas marketing jumped to Rs329 crore in the September quarter from Rs190 crore a year ago.
Profit from operations before other income, finance costs and exceptional items stood at Rs1,178.4 crore compared to Rs509 crore the same time a year ago.
Total expenses declined 21% in the quarter to Rs10,880 crore from a year ago, while finance costs fell to Rs120 crore from Rs 279 crore, the company informed the stock exchanges.
The state-owned company, which has over 11,000 km of gas transportation network with the capacity to pump 206 million standard cubic metres a day of gas, is expanding its network—especially in the southern and eastern part of the country. Gail’s business is expected to benefit from the government’s emphasis on creating more infrastructure to promote consumption of gas in the economy as part of its climate change strategy.