Petronet LNG Limited Q3 FY24 Earnings Conference Call Insights

Key highlights from Petronet LNG Limited (PETRONET) Q3 FY24 Earnings Concall

• Financial Performance
  • Registered highest ever PBT of INR1,597 crore and PAT of INR1,191 crore in Q3 FY24.
  • PBT increased 46% compared to previous quarter and was flat versus last year’s Q3.
  • PAT increased 46% versus previous quarter and was flat versus last year’s Q3.
  • Volume throughput at Dahej terminal increased 21% compared to the prior year nine month period.
• Operating Performance
  • Dahej terminal utilization was 96% in Q3 FY24.
  • Total throughput volume at Dahej and Kochi terminals was 232 TBT in Q3 FY24.
  • Higher utilization of Dahej terminal and efficiency in operations drove profitability growth.
• Outlook
  • Petronet LNG registered robust volume growth in nine months of FY24.
  • Higher volumes along with high utilization levels at Dahej terminal are expected to continue driving profitability going forward.
• Red Sea Disruption
  • Petronet LNG has long-term contracts with Qatar for LNG supply, so no impact on those cargoes.
  • Disruptions could impact LNG cargos transiting through Suez Canal and Red Sea from sources like US.
  • But Petronet does not expect impact on cargoes coming to its terminal, even from other sources.
• Receivables
  • INR1,263 crore of receivables outstanding for user pay charges in 2021 and 2022.
  • Settlement reached with customers to provide bank guarantees securing these receivables.
  • No revenue loss or accounting impact for Petronet, receivables are secured.
  • If volumes shortfall is made up by 2024/2025, user pay charges will be waived.
  • Already recognized revenue from user pay charges will be reversed.
• Increase in Opex
  • INR228 crore provision created against receivables, adjusting it OPEX is in line.
  • As receivables recovered, provisions will be reversed over time.
  • Increased OPEX is temporary accounting impact, will normalize.
• Kochi/ Gorgon LNG
  • Kochi terminal gross margin impact was INR136 crores.
  • Service revenue was INR623 crores, depreciation and finance costs were INR84 crores and INR69 crores.
  • Year-to-date Gorgon LNG volumes were 14.4 cargoes compared to 9 cargoes in Q2 and 8 cargoes in prior year Q3.
• Trading and Inventory Gains
  • Trading gains were INR40 crores versus INR19 crores in Q2.
  • Inventory gains were INR147 crores.
• Kochi-Mangaluru Pipeline Project
  • 250 km section from Coimbatore to Bangalore expected to complete by end of 2022.
  • Will connect Kochi terminal to national gas grid.
  • Should enable additional gas volumes from Kochi terminal from FY25.
• Bank Guarantees Status
  • Bank guarantees being taken for full INR1263 crores of user pay charges.
  • Some operators have provided BGs, others in process of providing.
  • Settlement agreements also being formally signed.
• Upcoming Projects
  • Dahej expansion to 22.5 MTPA by Mar 2025.
  • New jetty at Dahej at cost INR1700 crores by 2024.
  • Can handle LNG, propane, ethane.
  • 2 new LNG tanks at Dahej by Jun 2024.
  • FSRU terminal planned at Gopalpur, Odisha.
  • Expected to take 3 years for completion.