GAIL (India) (GAIL) Q4 05/06 earnings summary

Executive summary

• FY2005-06 turnover rose 16% to Rs.14,459 crore and PAT increased 18% to Rs.2,310 crore; gas transmission volumes grew 10% to 78.87 MMSCMD.

• Strategy centered on strengthening gas transmission and sourcing, expanding upstream E&P, and growing petrochemicals, city gas and international businesses.

• ERP was implemented organization-wide; new gas and telecom management centers enabled centralized, 24/7 monitoring of transmission and network assets.

Financial highlights

• Turnover, net of excise duty and internal consumption, was Rs.14,459 crore versus Rs.12,412 crore in FY2004-05; PAT was Rs.2,310 crore versus Rs.1,954 crore.

• PBT reached Rs.3,277 crore versus Rs.2,871 crore; gross margin was Rs.3,954 crore versus Rs.3,950 crore.

• Operating income, including internal consumption and net of excise duty, was Rs.16,351 crore, up 20% YoY.

• Operating cash flow was Rs.3,231 crore; cash and bank balances closed at Rs.4,496 crore, up 30% YoY.

Outlook and guidance

• E&P investment of Rs.900 crore was planned over the next two years to strengthen supply security; drilling in Bay of Bengal Block 26 was expected to begin in FY2006-07.

• Revised strategy targeted stronger gas sourcing, transmission and marketing, alongside margin-enhancing petrochemicals and city gas projects.

• Ethylene capacity rose from 300,000 to 400,000 TPA; polymer capacity was being expanded by 100,000 TPA, with petrochemical projects considered in Assam, Kerala and Iran.