GAIL (India) (GAIL) Q4 04/05 earnings summary

Executive summary

• FY05 turnover rose 14.6% to Rs. 12,412 crore; PAT grew 4.6% to Rs. 1,954 crore despite subsidy sharing rising to Rs. 1,137 crore from Rs. 428 crore.

• Physical volumes increased across key businesses: gas sales +8.7%, polymers +13.3%, liquid hydrocarbons +8.7% and LPG transmission +16% YoY.

• Strategy emphasized gas value-chain integration, pipeline expansion, exploration, LNG sourcing, city gas distribution and international growth.

Financial highlights

• Turnover, net of excise duty and internal consumption, was Rs. 12,412 crore versus Rs. 10,826 crore; other income was Rs. 349 crore versus Rs. 244 crore.

• EBITDA was Rs. 3,950 crore, up 9% YoY; PBT was Rs. 2,871 crore versus Rs. 2,814 crore, and PAT was Rs. 1,954 crore versus Rs. 1,869 crore.

• EPS increased to Rs. 23.11 from Rs. 22.11; book value per share rose to Rs. 101.22 from Rs. 88.

• Consolidated total income was Rs. 14,207 crore and net profit Rs. 2,039 crore; total assets were Rs. 14,786 crore.

Outlook and guidance

• Indian gas demand was projected to rise at a 16% CAGR to over 300 MMSCMD by FY11, from ~150 MMSCMD; gas’s energy mix share was expected to reach 14% by FY12 from 8%.

• Pata polymer capacity was being expanded from 310,000 TPA to 440,000 TPA; potential petrochemical projects in Assam, Kerala and Iran were under exploration.

• Pipeline priorities included Dahej-Uran, Thulendi-Phulpur, Vijaipur-Kota and other inter-state links; expansion plans required significant future investment.

• LNG sourcing, including a 5 MMTPA Iran supply agreement, and participation in Dahej, Dabhol, Kochi and Ennore were intended to support supply growth.