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29 Oct 2015


Hi Friends,   For 2 Q  FY 2016, Petronet LNG (PLNG)’s  EBITDA  came in ahead of market expectations at Rs.467 cr.  The EBITDA  declined 10% yoy  but was up 29% sequentially.    Contribution margin for the quarter came in at Rs.37.4/MMBTU as against Rs.42.0/MMBTU in the corresponding quarter last year  and vs Rs.35.7 MMBTU in the sequential previous quarter.   The better-than-expected contribution was on account of higher utilization at the Dahej terminal, which operated at 121% of its capacity ( as against 98% utilisation in the sequential previous quarter) processing 154TBTU during the quarter.  The management indicated that the increase in utilization was temporary and should be 100% going forward.  

Blended realization was lower at Rs.481/MMBTU as against Rs.637/MMBTU in 1QFY 2016 and Rs.730/MMBTU  in 2Q FY 2015, on account of lower spot LNG prices.  Expansion plan remains on track:  Expansion of capacity of the Dahej terminal from 10MMPTA to 15MMPTA is going on as per schedule and the Management expects to complete the same by 2016-end.  The company has  also initiated the process for selection of EPC contractors for further expansion of the Dahej terminal’s capacity to 17.50 MMPTA.  Outlook and valuation:  PLNG is a direct play on the gas deficit story in India.  The company’s strong expansion plan makes it well positioned to benefit from the demand supply gap.   Expecting better future in this company. 

Good Luck.                                                         See You Later.

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