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4QFY11 results
Petronet LNG’s 4QFY11 net profits rose 21%QoQ to Rs2.06bn. Ebitda beat
forecasts by a modest 2% on the back of higher volumes (+5%QoQ) but
higher other income and lower interest helped pull EPS 20% ahead of our
forecast. With domestic gas production struggling, LNG imports continue
to rise; we are upgrading our FY12 volume estimates by 2% and EPS by
5%; we continue to model no trading gains which could add 8% to EPS.
We are also upgrading our target to Rs150/share and maintain O-PF.
4QFY11 Ebitda 2% ahead of estimates
PLNG’s 4QFY11 net rose 21%QoQ to Rs2.06bn (Rs2.75/sh) – 20% ahead of
our estimates. Ebitda (+2%QoQ) beat our estimates by a more modest 2%
as higher than expected volumes (126 trbtu, +5% QoQ on higher spot and
third party volumes) offset lower implied realised margins (lower trading
gains) and higher opex (~Rs40m on road development at Kochi and Rs35-
40m on one-off maintenance expenses on gas turbines and the jetty).
4QFY11 beat on below-Ebitda items
Higher than expected other income (Rs110m interest on tax refunds related
to PLNG’s Section 80-IA benefit claims) and lower interest expenses
(refinancing of Rs13bn Dahej terminal debt at favourable rates, lower LC
charges) helped explain most of the beat. PLNG’s FY11 EPS stood at Rs8.3.
PLNG is a beneficiary of stagnant domestic gas volumes
With gas production from Reliance’s KG-D6 block continuing to struggle and
production from other sources several years away, domestic gas production
has plateaued near term. This bodes well for import volumes for PLNG. Our
recent discussions, for example, suggest that PLNG has been able to book
1.5mtpa of capacity for FY12 on top of the 7.5mtpa RasGas volumes. With
Gail and GSPC both importing one cargo a month (0.7-0.8mtpa annualised
each), PLNG is currently annualising well over 10mt of volumes in 1QFY12.
Upgrading FY12-14 EPS by 2-5%; maintain O-PF
We are upgrading FY12 volume estimates by 2% to 10.4mt and EPS by 5%;
we also model lower finance costs which lead to 2-4% upgrades for FY13-14.
We continue to model no trading gains on short term cargoes but note that it
has usually accrued +US$0.25/mmbtu – this can add ~8% to EPS. We are
also upgrading our target to Rs150/sh (+10%, implied 15x Mar13 PE) and
maintain O-PF. A cut in Dahej re-gas tariffs (5ppt = 10% on EPS) and
decisions that impair Kochi economics (we model ~16% equity IRR) are risks.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
4QFY11 results
Petronet LNG’s 4QFY11 net profits rose 21%QoQ to Rs2.06bn. Ebitda beat
forecasts by a modest 2% on the back of higher volumes (+5%QoQ) but
higher other income and lower interest helped pull EPS 20% ahead of our
forecast. With domestic gas production struggling, LNG imports continue
to rise; we are upgrading our FY12 volume estimates by 2% and EPS by
5%; we continue to model no trading gains which could add 8% to EPS.
We are also upgrading our target to Rs150/share and maintain O-PF.
4QFY11 Ebitda 2% ahead of estimates
PLNG’s 4QFY11 net rose 21%QoQ to Rs2.06bn (Rs2.75/sh) – 20% ahead of
our estimates. Ebitda (+2%QoQ) beat our estimates by a more modest 2%
as higher than expected volumes (126 trbtu, +5% QoQ on higher spot and
third party volumes) offset lower implied realised margins (lower trading
gains) and higher opex (~Rs40m on road development at Kochi and Rs35-
40m on one-off maintenance expenses on gas turbines and the jetty).
4QFY11 beat on below-Ebitda items
Higher than expected other income (Rs110m interest on tax refunds related
to PLNG’s Section 80-IA benefit claims) and lower interest expenses
(refinancing of Rs13bn Dahej terminal debt at favourable rates, lower LC
charges) helped explain most of the beat. PLNG’s FY11 EPS stood at Rs8.3.
PLNG is a beneficiary of stagnant domestic gas volumes
With gas production from Reliance’s KG-D6 block continuing to struggle and
production from other sources several years away, domestic gas production
has plateaued near term. This bodes well for import volumes for PLNG. Our
recent discussions, for example, suggest that PLNG has been able to book
1.5mtpa of capacity for FY12 on top of the 7.5mtpa RasGas volumes. With
Gail and GSPC both importing one cargo a month (0.7-0.8mtpa annualised
each), PLNG is currently annualising well over 10mt of volumes in 1QFY12.
Upgrading FY12-14 EPS by 2-5%; maintain O-PF
We are upgrading FY12 volume estimates by 2% to 10.4mt and EPS by 5%;
we also model lower finance costs which lead to 2-4% upgrades for FY13-14.
We continue to model no trading gains on short term cargoes but note that it
has usually accrued +US$0.25/mmbtu – this can add ~8% to EPS. We are
also upgrading our target to Rs150/sh (+10%, implied 15x Mar13 PE) and
maintain O-PF. A cut in Dahej re-gas tariffs (5ppt = 10% on EPS) and
decisions that impair Kochi economics (we model ~16% equity IRR) are risks.
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