Petronet LNG Limited
8,317words
117turns
11analyst exchanges
3executives
Management on call
Varatharajan Sivasankaran
ANTIQUE STOCK BROKING P E TRO N E T
Vinod Kumar Mishra
DIRECTOR (FINANCE) - PETRONET LNG LIMITED
Debabrata Satpathy
GENERAL MANAGER (F&A)
Key numbers — 40 extracted
4474 Crore
ar quarter and FY2021-2022. First highlight is that we have generated first ever highest PBT of 4474 Crores and highest ever PAT of 3352 Crores as against PBT of 3968 Crores and PAT of 2949 Crores. So the
3352 Crore
highlight is that we have generated first ever highest PBT of 4474 Crores and highest ever PAT of 3352 Crores as against PBT of 3968 Crores and PAT of 2949 Crores. So the growth in PBT and PAT has been 13%-
3968 Crore
rated first ever highest PBT of 4474 Crores and highest ever PAT of 3352 Crores as against PBT of 3968 Crores and PAT of 2949 Crores. So the growth in PBT and PAT has been 13%-14% respectively and again if
2949 Crore
PBT of 4474 Crores and highest ever PAT of 3352 Crores as against PBT of 3968 Crores and PAT of 2949 Crores. So the growth in PBT and PAT has been 13%-14% respectively and again if you look at the through
13%
rores as against PBT of 3968 Crores and PAT of 2949 Crores. So the growth in PBT and PAT has been 13%-14% respectively and again if you look at the throughput in Dahej terminal as well as the overall
14%
s as against PBT of 3968 Crores and PAT of 2949 Crores. So the growth in PBT and PAT has been 13%-14% respectively and again if you look at the throughput in Dahej terminal as well as the overall thr
984 Crore
last quarter but far, far better than the corresponding quarter of previous year. So PBT has been 984 Crores as against 1533 Crores in the previous quarter and 856 Crores in the corresponding quarter and P
1533 Crore
far better than the corresponding quarter of previous year. So PBT has been 984 Crores as against 1533 Crores in the previous quarter and 856 Crores in the corresponding quarter and PAT has been in current
856 Crore
r of previous year. So PBT has been 984 Crores as against 1533 Crores in the previous quarter and 856 Crores in the corresponding quarter and PAT has been in current quarter to the extent of 750 Crores as
750 Crore
and 856 Crores in the corresponding quarter and PAT has been in current quarter to the extent of 750 Crores as against 1144 Crores in the previous quarter and 623 Crores in the corresponding quarter. This
1144 Crore
corresponding quarter and PAT has been in current quarter to the extent of 750 Crores as against 1144 Crores in the previous quarter and 623 Crores in the corresponding quarter. This has been the highlight
623 Crore
in current quarter to the extent of 750 Crores as against 1144 Crores in the previous quarter and 623 Crores in the corresponding quarter. This has been the highlight and the growth of PBT has been 15% whe
Guidance — 20 items
“On the tariffs of Kochi if you could just give us a sense of how much decline has happened in this going forward and second in terms of the additional committed volumes so when do these additional volumes start coming in and how do we build in ramp up for this?”
“From that time till the end of the contract that will be thevolume, which will be flowinginto our terminal.”
“C3ii _ L I M I TED Vinod Kumar Mishra: No it has been settled, it has been completely settled and all have arrived at an agreement and we have in fact reached an agreement written agreement and now it will be the tariff which will be charged at the rate of Rs.”
“Vinod Kumar Mishra: Capex we have been reiterating time and again that we are already constructing two tanks at Dahej at a cost of almost 1200 Crores and another project which is coming in expansion of Dahej PETRONET .....”
“C3ii _ L I M I TED we are expanding by 5 MMTPA more so our capacity will increase from 17.5 to 22.5 it will be completed in next three years maximum by 2024 and/or maybe beginning of 2025.”
“So 5 MMTPA and perhaps we are doing in two phases the first phase will be completed in 2024 itself and the next phase 2.5 MMTPA will be completed in next six months.”
“Apart from that as soon as all other things will be cleared by the Board we will convey you the capex.”
“It is still on because we have not taken Board approval, so we are still doing some studies and detailed feasibility is to be conducted all those things are going on, so we still have to get the approval of Board , but that is on it is again I will discuss with you that it is an opportunity for us that right now there is huge demand for that petrochemical and basically it will be not a very big plan it is on the PDHPP only.”
“First phase will be complete by September, October 2024 and the next phase will be complete by 2025 March or April maybe May next year.”
“Jetty will be there because we have to award the contract; the approval has been given by Board we will be undertaking that it will take three years to get it.”
Risks & concerns — 9 flagged
On the tariffs of Kochi if you could just give us a sense of how much decline has happened in this going forward and second in terms of the additional committed volumes so when do these additional volumes start coming in and how do we build in ramp up for this?
— Abhishek Nigam
I have two questions, one was with respect to the volumes declined even in terms of long-term cargos for this quarter I apologize if you covered it earlier, just wanted to understand that the long-term cargo’s pricing still remains fairly favorable, so what has sort of driven the kind of 20 TBTU Q-o-Q decline in terms of even long- term offtake, if you can just give us some sense of that?
— Probal Sen
It is more of a normal contractual fulfillment rather than any slowdown in demand is what you are saying?
— Probal Sen
Vinod Kumar Mishra: There was no slowdown it is a normal fulfillment of the contract as per the agreed annual delivery plan.
— Probal Sen
In fact it is very difficult to answer because coal import in any case is there no doubt because the gas is so costly that is not possible to use gas for power generation, but I think when it comes to $15-$16 then perhaps if even power sector will pick up and they will take gas.
— Vinod Kumar Mishra
C3ii _ L I M I TED clarification in this regard is that it is only very few contracts that those who are not utilizing the natural gas but of course some of the customers are not using the gas and using alternate fuels, but it is not in all the cases, but perhaps the kind of sentiment, kind of enthusiasm which should have been there had the prices been low that is not there, people are not able to import gas this spot gas so that is the challenge.
— Vinod Kumar Mishra
Otherwise there is no issue and as far as the pipeline connectivity in Bengaluru is concerned that is already going on as I have mentioned in my earlier conferences also that pipeline is already laid up to Coimbatore and it is only a stretch of 250 kilometers from Coimbatore to Bengaluru that is to be completed but that is a big challenge.
— Niharika Jain
Just one last thought if you are looking at the CGD business driving the growth in natural gas is not there a risk to that growth from the penetration of electric vehicles in the transportation sector for CNG and what is your assessment of that risk and how do you see that playoffs over the next few years?
— S Ramesh
Yes, so if you are looking at the CGD sector driving the growth for demand for gas in India over the next two years and you take the demand from the transportation sector for CNG is not there an element of risk to that growth from the penetration of electric vehicles particularly in a taxi segment and buses as we go forward so what is your assessment of that risk for the growth in natural gas?
— S Ramesh
Q&A — 11 exchanges
Q
Hi! Just two questions for me. On the tariffs of Kochi if you could just give us a sense of how much decline has happened in this going forward and second in terms of the additional committed volumes so when do these additional volumes start coming in and how do we build in ramp up for this?
Vinod Kumar Mishra
First question is regarding how much impact it has been. So as I just wanted to intimate you that it has been reduced from Rs. 79.14 per MMBTU to Rs.70 so this is the reduction which has taken place from April 1, 2019 and total impact if you look at it has been in the range of 214 Crores so that has been a hit which we have taken in the last quarter Q4 this year and now all the issues have been settled and going forward it will be charged at the rate of Rs.70 per MMBTU and 5% increment will be there every year so from April 1, 2019 if you charge Rs.70 then plus 5% every year, so that 5% has be
Q
Thank you for this clarification. Just a bit more here. Now there are no more receivables on account of Kochi right is the understanding correct?. Vinod Kumar Mishra: No more receivable on account of?
Puneet Gulati
On account of Kochi. PETRONET ..... C3ii _ L I M I TED Vinod Kumar Mishra: No it has been settled, it has been completely settled and all have arrived at an agreement and we have in fact reached an agreement written agreement and now it will be the tariff which will be charged at the rate of Rs. 70 from April 1, 2019 it is settled now. 178 Crores credit notehas been given? Vinod Kumar Mishra: Yes. So, if I were to look at actual revenue I should be adding this number to the topline right on a normative basis? If you look at the actual revenue you need to add 214 Crores because this 170 is till
Q
Thank you for the opportunity Sir. Good afternoon. I have two questions, one was with respect to the volumes declined even in terms of long-term cargos for this quarter I apologize if you covered it earlier, just wanted to understand that the long-term cargo’s pricing still remains fairly favorable, so what has sort of driven the kind of 20 TBTU Q-o-Q decline in terms of even long- term offtake, if you can just give us some sense of that? Vinod Kumar Mishra: Actually it is as per ADP if you look at the annual delivery plan so accordingly there has not been any default, in third quarter it is o
Probal Sen
It is more of a normal contractual fulfillment rather than any slowdown in demand is what you are saying? Vinod Kumar Mishra: There was no slowdown it is a normal fulfillment of the contract as per the agreed annual delivery plan. The second question was if I aggregate the kind of capex plan you did mention multiple plants 1200 Crores for the two tank, 1700 odd Crores for the jetty and about 600 odd Crores for the Brownfield expansion which aggregates to about 3500 Crores if I am not mistaken. Now if we look at the financial performance and the balance sheet of our company we are comfortably g
Q
Good afternoon Sir. I have got a few questions. First one is what is the current run rate like; I think spot LNG has cooled off also a bit from more than $30 to around $20-$25 now?
Vinod Kumar Mishra
It is $18-$25 today. So have you seen any uptick vis-à-vis Q4 average utilization which was like say 80%-81% or is it the same right now? For this Q4 I have just mentioned that it is now that prices have come down but in March it has been in the range of $25-$30. Our utilization in Q4 was not to that extent, if you look at it around 79% on Dahej terminal so that way we can say because of high LNG prices spot LNG is not coming to India in same ratio it was coming earlier year, but as you see I am seeing on the optimistic side that prices today are 18.25 it comes to $15-$16 and perhaps it will s
Q
Thank you Sir for giving this opportunity. In terms of FY2023 would you be able to share more color on the volumes do you have the annual delivery plans available which can sort of give us an indication about the volumes?
Vinod Kumar Mishra
For next year you are asking for? Yes. I think we should not discuss this issue right now, this is something which we have to keep with us disclose it later on, but now it is too early to say anything, but I am saying whatever contracts are there is a flexibility to the extent of 80% they can exercise, so that part is there so maybe that PETRONET ..... C3ii _ L I M I TED 100% if they have not done in ADP then perhaps up to 80% they have to do otherwise there is a use or pay clause and perhaps because long-term contract in any case nobody is leaving everybody is very, very eager to take all lon
Q
Hi! Sir, the question is on the use or pay contract. So this contract on the service volume how long is this contract let us say if the customer wants to change it when he gets opportunity to change it? Vinod Kumar Mishra: No, it is not a contract which can be changed by the capacity bookers they have to honor the contract so it is not like that we can charge as per the contract it is a firm contract and it is valid I think up to 2035.
Anubhav Aggarwal
For everybody? For everybody, so it is a very firm contract it is not as if there is an escape to it because nobody can think of that. What is the sense the guys who are let us say the service volumes which are lower right now and the tolling volumes are lower right now are they not using gas as a thing or they using any alternative thing right now? It is not like that what is happening that the customers or offtakers who are having a long-term contract they have no hesitation in bringing the cargos and use the capacity. It is only in those cases all the offtakers who have not tied up a long-t
Q
Hello good afternoon. My question is regarding this Kochi capacity so how are you going about it now that even the tariff has been revised and I think they were waiting for some GAIL pipeline to get completed so I just wanted to get some clarity on this Kochi terminal? Vinod Kumar Mishra: Yes, Kochi terminal as I already mentioned that after this Bengaluru-Kochi pipeline consumption has increased, if you look at the capacity utilization this year we have utilized almost 21% capacity of Kochi terminal as compared to 18% last year, but it should have been more than 30% I agree and because prices
Niharika Jain
Thank you and I also have one more question on the long-term contacts we have for LNG so I understand there are I think three running contracts two are with RasGas for 7.5 and 1 so basically 8.5 from RasGas and 1.43 around from Mobil Australia, so have we entered into any other long-term contracts in this Q4 or are we in talks with anyone for long-term contracts because I think the new circular also has come where GAIL would be I think needing LNG too for blending for CBD companies so just wanted some thought there? PETRONET ..... C3ii _ L I M I TED Vinod Kumar Mishra: That is what I was telli
Q
Good evening Sir thank you very much. The first thought is if LNG prices stabilize with this $18 to $20 what is the kind of growth we can expect in terms of your regasification volumes in FY2023-2024 what kind of growth we can expect? PETRONET ..... C3ii _ L I M I TED Vinod Kumar Mishra: After this price today I have seen I am very optimistic that more cargos will come now and if it comes to the level of almost $15 then perhaps it will be good for the gas industry also and people who are using natural gas so I am hopeful that with this kind of pricing certainly there is a good hope that we can
S Ramesh
No if you look at your FY2020 volume you had done 928 TBTU so is that kind of volume possible in the next one year? Vinod Kumar Mishra: What kind of volume you are asking? So this year you have done 847 TBTU. 847 we have done. So is it possible to achieve about 8% to 10% growth in the next one year? Vinod Kumar Mishra: Even more than that we will expect but whatever it happens it is good but we will do whatever we can do to increase it to the maximum possible maybe 5% to 10% we will increase it. The second thought is now based on this whole gas to be managed by GAIL is there any data available
Q
Sir, I wanted to know the decrease in the profitability from 1140 Crores to close to 750 Crores this quarter so what are the major factors driving it? Vinod Kumar Mishra: Major factors I will just give you one or two items which can perhaps help you in understanding why it has shown as compared to previous quarter you are asking, in previous quarter it is Q3 of 2021-2022 if you look at that then the trading margin has increased at 68 Crores as compared to previous quarter and as compared to corresponding quarter there has been growth. The major factor is of course this has been the trading mar
Q
Good afternoon Sir. Can you please provide a breakdown of the volume in terms of the long-term spot and the volume tied to your trading margin and just to understand further how should we one look at your trading margin going forward if you can provide some comments on that, that would be helpful? PETRONET ..... C3ii _ L I M I TED Vinod Kumar Mishra: We are talking about whatever trading we have done you have to know that or overall you are asking?
Ankur Agarwal
Whatever trading margin that you have generated, what are the volumes tied to that, how should one look at that? Vinod Kumar Mishra: The trading margins that have been generated as you know during the financial year the spot prices had been at a very high level with about 9 to 10 TBTU of spot volume that we have always given the volume numbers to you these kind of trading margins have been on in the year and as far as your question regarding the projections of trading margins it depends on how the market is, right now the prices have fallen down to about $20, so it will depend largely on the m
Q
Thank you Margaret. I just had a couple of questions before we can close. One if you can provide some perspective somebody ready to go and had for a long-term contract today what is kind of rates which are available and second question is on Kochi earlier we said in the price negotiation we will ask for additional commitment of volume from the offtakers have they committed any incremental volume? PETRONET ..... C3ii _ L I M I TED
Vinod Kumar Mishra
So first question is regarding? If somebody today had for a long term contract what kind of terms are available as of now? Vinod Kumar Mishra: Terms of the long-term contract we are still banking on the contract which has been finalized by RasGas with countries like China and Bangladesh and others, but at that point of time they have contracted with 10.2% of the slope I do not know this is the right environment or not, but we still are hoping that it should be around that and that happens then it will be a favorable contract for future and I think we have already started negotiation but the en
Opening remarks
Varatharajan S
Thank you Margaret. Good afternoon everyone. It is my pleasure to welcome all the participants and the management to this call to discuss the fourth quarter results of Petronet LNG. I would like to hand over the floor to Mr. Debabrata to take the proceedings forward from the management side.
Debabrata Satpathy
Good afternoon. First we would request our Director Finance to give the opening note. Vinod Kumar Mishra: Very good afternoon to all of you. This is V K Mishra – Director Finance – Petronet LNG Limited. First of all I would like to give brief snapshot of the financial result for this particular quarter and FY2021-2022. First highlight is that we have generated first ever highest PBT of 4474 Crores and highest ever PAT of 3352 Crores as against PBT of 3968 Crores and PAT of 2949 Crores. So the growth in PBT and PAT has been 13%-14% respectively and again if you look at the throughput in Dahej terminal as well as the overall throughput in Dahej and Kochi. I would like to mention here that because of the higher LNG prices our volume has not been as high as we anticipated in the beginning of the year, but still we are able to maintain our profitability growth better. If you see the throughput in Dahej terminal has been to the extent of 178 TBTU as against 196 TBTU in the previous quarter a