NEW DELHI: The country’s largest gas transportation company Gail India reported a 35% jump in its net profit in the first quarter of the current financial year despite a subsidy payout of `445 crore. The company reported a net profit of `887 crore for the April-June quarter and announced a bond programme to fund its expansion.
“In January next year the company will bring `500 crore bond issue with greenshoe option of 50% for 7-10 year tenure to part fund its projects,” said BC Tripathi, Gail chairman & managing director.
The company has a `40,000-crore capital expenditure plan for the next three years. While `23,500 crore of the total capital expenditure will go towards doubling Gail’s pipeline capacities, balance money will be spent on petrochemical, city gas and energy exploration projects.
Mr Tripathi said the first major project approved by the board on Monday is doubling the capacity of Gail’s petrochemical plant at Pata (Uttar Pradesh) to 9 lakh tonne with an investment of `8,200 crore. “The project will be completed in 36 months from the zero date tomorrow,” he said. The company will use a combination of debt and equity to fund its future projects. “HDFC has already sanctioned us `1,250 crore loan and we have an ECB (external commercial borrowing) plan of $150 million by December this year,” Mr Tripathi said. The current interest rate for the HDFC loan is 8.83% (the government security interest rate plus 2.10%).
Speaking about company’s financial performance in the first quarter of 2010-11, he said the better performance is due to higher volume of natural gas transmission, higher production of liquefied natural gas and liquid hydrocarbons.
State-owned Gail managed better net profit in Q1 (2010-11) despite a 593% jump in subsidy bill. It paid `445 crore to oil marketing companies — IOC, BPCL and HPCL — as part compensation for selling petrol, diesel, cooking gas and kerosene at government-determined rates which were below cost. It had paid `75 crore subsidy in the same quarter previous year.
Gail’s stock rose 2.1% to `447.2 at the close of trading hour on the Bombay Stock Exchange (BSE). The financial results were announced after market close. The company reported around 18% growth in its turnover (net of excise) at `7,096 crore in April-June 2010 against `6,039 crore a year ago.
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