petronet lngThe September quarter performance was boosted by rebounding capacity utilisation. The pandemic and ensuing mobility restrictions meant that usage remained soft in the April-June quarter. However, usage at the company’s Dahej terminal crossed 100% in the last quarter. Re-gas volume of 225tbtu (trillion British thermal units) with 101% utilization beat analysts’ expectations, leading to better-than-expected performance. Kochi terminal utilization was flat at 23.5% sequentially.
Petronet LNG Standalone Adjusted Q2FY22 Ebitda and Net Profit of 1,363 crore and Analysts at Emkay Global Financial Services Ltd said Rs 872 crore beat the estimates by 20% and 24% respectively. EBITDA was higher, hitting 8% and 11%, driven by gross spread, he said.
The company’s management is optimistic about achieving 17.5 million tonnes of volume and full utilization at the Dahej terminal in FY12. Demand for long-term contracted LNG remains strong as it is much cheaper than spot LNG. However, with the sharp rise in spot gas prices, spot cargo has suffered.
It is expected that spot gas prices will normalize by March, which will boost capacity utilization at the Kochi terminal. Analysts say the utilization of the Kochi terminal could now be increased from 22% to 30-35% in case LNG spot prices normalise.
The company has also retained its capital expenditure guidance: 4,000 crore in three years for Dahej terminal.
Overall, analysts remain positive about the company’s prospects. Analysts at Sharekhan said valuations at 9.9 times FY13 estimated earnings are attractive, given the earnings visibility, high return of equity, free cash flow and dividend yield of 9% and 5%.
The Board has already declared a special dividend of Rs. 7/share, which means 3% dividend yield.
The stock was up more than 1% in early deals trade on Thursday.
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