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GAIL PAT up by 70 per cent in the second quarter of FY 2005-06

Mumbai, October 27, 2005 

GAIL (India) Limited today announced a 70% jump in its net profits for the second quarter of the current financial year. Profit After Tax of the company  has gone up to Rs. 774 crore in the second quarter of 2005-06 as against Rs. 456 crore in the corresponding quarter of the last fiscal. Turnover (net of Excise Duty) has increased by 17 per cent to Rs. 3,601 crore in the second quarter of 2005-06 as against Rs. 3,081 crore in the second quarter of the previous financial year. Gross margin is also up by 13 per cent. 

During the first half of the current financial year, the turnover of the company has increased to Rs. 6889 Crore from Rs. 5955 Crore, thereby registering a growth of 16% over the same period last year. However, the Profit after Tax is Rs. 1258 cr. as against Rs. 795 cr. of the pervious year period, an impressive growth of 58%. This increase of the profits have been achieved by the company despite the fact that it continues to bear the subsidy burden towards the under recoveries on Domestic LPG and PDS Kerosene as per the Government of India directives and increase in gas price for our feedstock and fuel in the second quarter. The gross margins of the company have also shown an impressive increase of 18% from the same period last year and stood at Rs. 2102 crore.

Natural gas transmission continues to be the core business area of GAIL showing a consistent growth. It has increased by 8 per cent to 76.80 MMSCMD in the second quarter of the financial year 2005-06 from 71.40 MMSCMD in the corresponding quarter of the previous financial year. The gas transmission has increased by 11 per cent in the first half to 77.86 MMSCMD from 70.26 MMSCMD in the corresponding period of the previous financial year. The gas trading also showed an increase of 17%. There was a 31% growth in the revenues from LPG and other liquid hydrocarbons because of the increase in the weighted average price and a decrease in the LPG subsidy as compared to the last year. Also with the increase of the weighted average cost of petrochemical prices this year, it has shown a growth for the company.

The LPG transmission has increased by 3 per cent to 995,000 MT in the first half of the current financial year as against 965,000 MT in the first half of the previous financial year. The LPG and Other Liquid Hydrocarbon sales have decreased from 693,000 MT in the first half of the previous financial year to 637,000 MT in the corresponding period of the current financial year. The polymer sales have decreased by 5 per cent to 131,000 MT in the first half of the current financial year as against the 138,000 MT in the corresponding period in the previous financial year. 

Recent Developments

Exploration and Production
GAIL Consortium has bagged 3 blocks under NELP-V, one Deep Water Block (AN-DWN-2003/2) in Andaman with ENI India Limited and ONGCL and the other Onland Block (CB-ONN-2003/2) in Cambay, Gujarat with GSPCL, Jubilant Capital Pvt. Ltd and Geo Global Resources. Furthermore, GAIL has also got stake in the A-1 and A-3 blocks in Myanmar.

Ratnagiri Gas and Power Private Limited
GAIL has been entrusted with the task of completion of the LNG terminal at Dabhol and to source LNG for the same. The GAIL has made an investment of Rs. 500 crore in the RGPPL. RGPPL has taken over the assets of the erstwhile Dabhol power project. GAIL has successfully managed to reconstitute the original EPC consortia in a major development towards achieving early completion of the Dabhol LNG Terminal. The consortia would undertake completion of the balance works under the active supervision of two Project Management Consultants being engaged in this regard. With the investment and the taking over of the assets, the consolidated asset base of the company has also increased.

NPMP Award for DVPL

GAIL (India) Limited has received the coveted NPMP award in recognition of excellence in Enterprise Category for Dahej-Vijaipur Pipeline Project. GAIL has completed the Dahej- Vijaipur Pipeline Project in a record period of 27 months. The Project was completed six months ahead of schedule, resulting into a cost saving of over Rs. 600 crore. This is the largest diameter cross country onshore pipeline for transportation of high pressure gas so far executed in India. The total approved cost of the project was Rs. 2936 crore including foreign exchange of Rs. 1163 crore. The pipeline passes through Gujarat and Madhya Pradesh.

Participation in Nabucco Pipeline Project
GAIL is likely to pick up equity participation in the Nabucco Natural Gas Pipeline Project. GAIL (India) Limited together with Engineers India Limited made a presentation of the capabilities of GAIL and EIL and broad terms of association with the project in a meeting held in September 2005 in Paris. A final decision on GAIL equity participation in this mega transnational pipeline from the Caspian Sea to Central Europe is expected by end of 2005. GAIL has also offered its services for carrying out Operations and Maintenance for the proposed pipeline, highlighting its experience and expertise in the field.

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