Oh wow, thatâs unreasonable. I wonder why they nearly tripled their Finance Cost. I mean, itâs not like they need the capital. They produce huge cash flows and they already have a lot of capacity lying unused.
Thanks to corporate tax cut, Petronet LNG Q2FY20 PAT has crossed 1000crores
UFR30092019.pdf (3.9 MB)
Revenue - 9458 cr Q2FY20 vs 10856 cr Q2FY19( or vs 8717 Cr Q1FY20 sequential)
PAT - 1103 Cr Q2FY20 vs 562 cr Q2FY19 (or 560 cr Q1FY20 )
EPS nearly doubled to 7.35 (from 3.74 last quarter)
Management have also given 5.5Rs special interim dividend
There is also additional news from mgmt
a) Petronet is renegotiating the long term contract with Qatar Rasgas as it sees customers going for cheaper spot prices.
b) Russiaâs Novatek wants to set up a small scale LNG plant
c) Petronet looking to buy 26% stake in BPCLâs planned east coast terminal (this is bit old news)
Read more at:
http://timesofindia.indiatimes.com/articleshow/71808396.cms
Shorter term contracts can benefit the company a lot. The best case scenario would be to have many short term contracts with several suppliers.
With all the waves around privitisation in India, PLNG could very well turn out to be a good bet on energy demand for India.
Some good updates on Kochi utilization + few othersâŠ
BPCL has stake sale may require it to offload its stake in Petronet LNG. Is this expected to create supply over hang in market? The recent weakness in Petronet LNGâs price might be indicating it.
Request some advice on how should investor manage such situations. Thanks.
We donât encourage discussions about price action alone here in VP. Someone else selling their stake, even a large shareholder like BPCL, has no impact on the underlying business. In fact, in the case of Petronet LNG, it only reduces the conflict of interest that BPCL had being both a shareholder and a large customer.
Question was not about price action alone though.I wanted more information on what usually happens when such significant stake sales happen. Does it give opportunity for institutional investors to make investments or there is a possibility that ownership quality might also change. My curiosity also extends to to other stake sales in PSUs. like RITES which has come with OFS.
Thanks for your reply @dineshssairam. Its was helpful.
BPCL holds 12.5% equity of PLNG and is one of the promoters,
Q3 highlights
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Kochi Mangalore Pipeline will be completed by March end as confirmed by GAIL. Gradually utilization levels of Kochi terminal increases to 30+ % from current 17% . Dahej will continue with current utilization.
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Capex planned for opening 50 LNG stations for trucks, project to get started within next 6 months and further capex planned based on the progress.
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Company doesnât provide much information about tellurium deal
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Not much progress on other international projects in Sri Lanka and Bangladesh
Disc:Invested
Revenue was down 11.8 per cent to Rs 8,910 crore due to the fall in gas prices in Q3 compared to the previous year
PLNG has sourced ~100% of RasGas volume in CY19 despite the wide differential (~USD 4-5/mmbtu) between the RasGas and spot LNG prices.
Kochi terminal: Utilisation stood at 17.3% (highest ever) vs 7.9/15.7% in Q3FY19/Q2FY20.
In accordance with IND AS I 16 âLeasesâ adopted by the Company with effect from 1st April 2019. the Company has recognized the âRight to Use Assetsâ and corresponding âLease Liabilityâ of Rs. 3828.85 Crore as on 1st April 2019. As per IND AS I 16, âDepreciationâ and âlâinance Costâ expenses have been recognised on leases which were classified under âCost of the Goods Soldâ or âRent Expensesâ, as the case may be, in the profit and loss account. Accounting application oflnd AS 116 has resulted into decrease in profit before tax ofthc current quarter and nine months ended 31st December 2019 by Rs. 73.25 Crore and Rs. 261.37 Crore respectively as compared to accounting under previous standard
Disclosure: Invested
Shell has published Energy Outlook 2020 on the LNG sector:
Some highlights:
- LNG demand to double by 2040
- Supply additions coming to an end by 2022
(Disc: No positions)
Being from the marine industry and having the chance to do conversation with clients, its of no doubt that LNG % as a part of energy mix is going to increase in future. Some clients like BW have given me great insights about LPG and LNG but companies like Petronet are highly regulated (worst being in India) and just because the demand of certain âproductâ is growing that doesnât bring upon the prosperity of one certain company.
The company is also selling at 17-18 x of CFO, being regulated and not cheap -I guess it doesnât serve the model of opportunity cost.
Too uncertain.
Can you share part of that. I am interested to know.
Iâm unsure how LPG is positioned w.r.t. Natural Gas (NG). The CGD companies supply CNG through pipes and we supply LPG through cylinders. So, can CNG eat market away from LPG at-least for household use? I am specifying household usage because LPG has more stored energy per unit volume due to propane/butane mix compared to methane in CNG, and so industries may still prefer to use those. It is because of the same reason it is risky to transport LPG through pipelines!
Both NG & LPG are similarly polluting.
ref: https://www.hunker.com/13412559/propane-vs-methane-for-heating
If LPG still has a great prospect ahead, then Aegis Logistics is a good company to ride that theme, which can be supposed to be less regulated compared to PSU Petronet LNG.
@hitesh2710 ji may also share his thoughts as he also has this company in his watchlist.
Hello Sujay,
BW has signed up for 1st of its kind LPG Propulsion Engine for their LPG vessels and that statement in itself was a great insight. The biggest benefit of LPG is in its mobility and time taken for filling, you make lot of cost savings there as compare to CNG. MAN Engines are testing the dual fuel engines right now. Even if you look at BS VI complaint fuel, which will be having sulphur content in the range of 10 ppm - bloody as good as CNG !
Look at South Korea(or Japan and again this is coming from one of my client) - they use LPG at almost every place and Govt is very aggressive in promoting LPG. Indeed there are safety concerns with LPG cylinders being installed but we need canât neglect the base effect here (when did we heard about the a LPG run car blowing up). Fun Fact - South Korea import LPG (in barrels) almost somewhere close to India and Japan even more though the population gap is so -----
The reason we need policies like âUjawla Yojnaâ is because govt doesnât provide subsidy on cylinders or LPG sold by private players.
CNG have lot of limitations and isnât it evident that why we only have it few regions though its cheaper and cleaner but canât beat LPG in its calorific value. I canât make a stance on which company would benefit because sometimes regulatory authorities are doing certain things which are bonkers. For other countries, I have been observing and studying the why are they so into LPG and we cant neglect Ethanol and SNG.
SNG is basically LPG mixed with air and SNG can be substituted for CNG. I do believe at one point NG will replace LPG as a cooking fuel for domestic house holds but thatâs way far but industries will be using LPG.
I will also like to add few more points here :
As we all know that CNG is viable only in highly clustered populated areas, you canât put a CNG infra with in mid size dense areas, and this is the reason why cities like NAGPUR doesnât have Piped Natural Gas. (its because of the flatish architecture of the city).
The investment needed to set up a CNG pump station is around 3-4 crs (if my memory serves me right here) and the amount to set up a LPG(AutoGas) station is around 80 Lakhs only with payback period of 18-20 months.
CNG Kit will cost an auto wala around 35k while the LPG kit is around 10-12k and a CNG kit is much heavier than LPG Kit.
I am bullish on LPG specifically after South Korea lifted ban from LPG run cars.Even in you look at the western region - North America used to net importer of LPG and last year they became the net exporter which pushed the prices of Propane at around 0.41 USD/gallon. If that situation prevails - margins will be on a higher side.
The only issue in India is whenever we think about LPG, we think about cooking gas but its highly economical (if you consider other costs involved) than CNG.
A ground report from Auto Râwalas can help serve a distilled perspective about this.
NAGPUR is in 11th round bidding for cgd âŠfor your info