Petronet LNG expects topline to cross $3 bn mark this year

In an interview Published on Tue, Dec 21, 2010 with CNBC-TV18, Amitava Sengupta, Director ( Finance & Commercial), Petronet LNG, spoke about the latest happenings in his company and sector.

Below is a verbatim transcript of his interview with CNBC-TV18's Latha Venkatesh. Also watch the accompanying video.

Q: First up, would you say the situation has turned distinctly positive for a company like yours, with Reliance not being able to supply anything like what they promised in terms of gas? Has that impacted positively in terms of the realisations you have been able to get?

A: Yes, I think there is a definitely a demand surge for imported gas. As soon as the pipeline capacities and downstream infrastructures start growing, the demand is further going to go up. There is lot of latent demand in the market. We have some infrastructure issues at this point of time, not at our terminal, but downstream. Slowly from October onwards, the market for imported gas has also picked up considerably.

Q: So what will you be able to tell us by way of the volumes that you will do in the second half? Your first half volumes were tepid; year-on-year terms, probably the year ago was a very strong one, what can you tell us about second half volumes and also second half realisations?

A: You are right, first half, it was slightly low, but second half we are going to catch up with additional volume. We expect to close our year at around 8.25 million tonne, which will be more than the last year?s volumes. We expect our top-line to cross USD 3 billion mark. Our profitability will definitely be better than the year?s. So, I can say that very confidently at this point of time.

Q: What would it be, you will manage double digit margins you think? You have been able to do almost 10%. Will it be better than that?

A: I think these are forward looking statements.

Q: No, I am getting a ballpark. Will it be better than the 9% you managed?

A: Yes, definitely. I think it will be better than the last year?s margins.

Q: Give us an idea of how FY12 will pan out? You know your Kochi expansions kick in, the plan starts functioning only by end FY12. So, how will FY12 pan out?

A: Our physical completion will happen in December 2011. And the first quarter, calendar year 2012, we will commission the terminal. But, as you know, Dahej we have capacities, so we will definitely increase our volume in FY12 also. Once Kochi is commissioned, then we will start having volume there also. We will start slowly because we have to supply the market; we have to build the market there. So, we expect from Kochi in FY13, almost a million tonne, from Kochi itself. But the growth in the volume will remain in Dahej, it will happen, and once Kochi comes up, it will be an additional volume.

Q: So how are you expecting, say the next two years? I am asking you slightly longer time frame, up untill say 2014, the first two years of Kochi working, how do you see your ramp up in terms of compounded annual growth, if you can give us an idea in terms of volumes and in terms of profitability?.

A: You see by 2014, we should be working at a level of almost 12 million tonne, including Kochi; 10 million tonne at Dahej and almost 2 million tonne at Kochi. We should, from the present 8 millions plus volume, we will grow to 12 million tonne by 2014. The profitability will definitely increase, because ours is a utility business. So, as we increase our volumes, the profitability will definitely increase.

Source: Delhi, Friday, 21st December 2010
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