New Delhi, May 23 (IANS): State-run gas utility Gail India (GAIL) has declared a 69 per cent fall in net profit at Rs 260 crore for the fourth quarter ended March on account of an impairment charge on an investment, as compared to a PAT of Rs 832 crore in the same period a year ago.
Following the results announced after market hours on Monday, GAIL stock was trading lower by 4.22 per cent at Rs 374.65 a share on the BSE at 11.10 am on Tuesday.
The company's net income, however, rose by 16 per cent to Rs 13,674 crore, from Rs 11,802.40 crore in the fourth quarter of 2015-16, as revenue from petrochemicals rose by 57 per cent to Rs 1,766 crore and natural gas marketing by 12.7 per cent to Rs 10,370.56 crore.
GAIL, in a stock exchange filing, said the fall in net profit was due to accounting of impairment of investments in Ratnagiri Gas and Power Ltd (RGPPL) of Rs 783 crore in the fourth quarter. The net profit without the impact of impairment rose 25 per cent to Rs 1,043 crore in the quarter in question over the fourth quarter of 2015-16.
GAIL has an investment of Rs 974.31 crore in RGPPL, a joint venture with state-run NTPC, which has initiated the process of demerger of its business into two separate companies.
"In compliance of Ind AS 36, on impairment of assets, Gail and NTPC carried out an assessment of impairment of investment in RGPPL as on 31 March considering the restructuring of the business. Accordingly, a provision of Rs 783 crore has been made," GAIL said.
The GAIL board of directors recommended the payment of final dividend of Rs 2.7 per share for the year ended March 31, 2017.
Chairman B.C. Tripathi told reporters here on Monday that GAIL will begin regular imports of shale gas from the US in ships under a long-term contract from Dominion Cove Point LNG project from March 2018, and has floated tender for chartering ships for transportation. The company has also made a time-swap deal for a million tonne of US gas for 2018-19.
"We bought about 55 spot cargoes totalling under four million tonne of gas in 2016. This is expected to increase and be replaced by the US shipments," Tripathi said.