(Reuters) – GAIL (India) Ltd, the country’s largest gas distributor, reported a lower-than-expected quarterly profit on Monday hurt by weak performance at its core natural gas marketing segment.
The company’s standalone profit after tax fell to 14.12 billion rupees ($171.67 million) in the quarter ended June 30, from 29.15 billion rupees a year earlier. Analysts, on average, were expecting GAIL to earn 16.06 billion rupees, as per Refinitiv data.
The state-owned gas company’s revenue from operations fell about 14% to 322.27 billion rupees. Its natural gas marketing segment, which contributes 82.1% of the total revenue, saw an 18% drop in quarterly revenue.
During the quarter, GAIL’s biggest natural gas marketing segment saw a 56.2% slump in its profit. Its LPG and liquid hydrocarbons segment’s profitability dropped 68% during the quarter.
The firm is reeling from the impact of a former unit of Russia-owned Gazprom Marketing and Trading’s failure to deliver some liquefied natural gas (LNG) cargoes following western sanctions on Moscow over its invasion of Ukraine last year.
GAIL had said it will get four LNG cargoes from Sefe in June, equivalent to the volumes it was getting under a deal with Sefe, a former unit of Russia’s Gazprom.
Sefe resumed supplies to GAIL from March this year.
Additionally, GAIL revised the investment cost for a proposed propane plant to 112.56 billion rupees from an initial investment of 78.23 billion rupees.
GAIL’s shares, which were trading up 4.6% Monday morning, trimmed gains to be 1.3% higher after results.
($1 = 82.2490 Indian rupees)
(Reporting by Ashna Teresa Britto in Bengaluru; Editing by Nivedita Bhattacharjee)
