Petronet LNG, which accounts for over a quarter of the country’s liquefied natural gas (LNG) imports, saw its sales jump over 28 per cent last year (2008-09) to cross the Rs 8,000 crore mark on the back of forex gains. Net profit for the year was up just 9.43 per cent at Rs 518 crore. The company also declared a dividend of Rs 1.75 per share. Petronet expects to double its sales this year as new capacity comes online, P Dasgupta, Petronet’s managing director and CEO, tells Ajay Modi, dismissing the technical problems being faced in the expansion as “hiccups.” Excerpts:
The company has achieved 28 per cent jump in net sales, while profit has risen only 9.43 per cent, most of it (Rs 204 crore) coming only in the last quarter. What do you attribute this to?
Sales surged mainly on forex gains, though volumes have remained steady at 321 trillion british thermal units. We would have done well in the third quarter also, but we had to buy two cargoes in the spot market at high rates and supply it to our consumers at a contracted price, which was much lower. This led to a loss of nearly Rs 90 crore.
Even though the mechanical expansion of the Dahej terminal was over in March, there have been reports about problems, which have led you to declare a force majeure for five cargoes.
The mechanical completion of the terminal was over on March 7. However, the Engineering, Procurement and Construction (EPC) contractor gets 60 more days to completely stabilise the unit. There were some hiccups but a large part of the problem has been licked. As a result, we had to defer these cargoes which were supposed to come in May.
The capacity of the Dahej plant has been doubled to ten million tonnes in March. What impact will it have on this year’s turnover?
The capacity is being ramped up and we hope it will stabilise in early May. With this capacity, our turnover could almost double to around Rs 16,000 crore.
At five million tonne capacity, the company was operating at 130 per cent. How will the situation change with this expansion?
We are aiming to operate at around 90 per cent capacity and that will translate into 142 cargoes of 63,000 tonne each. In fact, the company has already contracted 116 cargoes for the current fiscal.
