Supernormal performance; positive outlook Petronet LNG :: Centrum

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Supernormal performance; positive
outlook
Petronet LNG (Petronet) reported the highest ever
quarterly re-gasification volumes which along with
reduction in interest cost and higher other income led to
supernormal performance in Q4FY11. The capacity
utilisation for the quarter stood at 100% which signifies
the latent demand in natural gas despite higher spot
LNG prices. We believe, with the uncertainty on the
ramp up of KG D6 output, Petronet‘s volumes will gain
further momentum. Hence, the outlook remains positive
for Petronet and we maintain Buy rating.

􀂁 Spot volumes expand further: We witnessed a good
jump in spot volumes during Q3FY11 which was further
enhanced during Q4FY11 with total re-gasification
volumes up 5.1% QoQ to 125.8TBTUs (Q3FY11:
119.7TBTUs). Spot volumes along with re-gasification
services were up sequentially from 19.7TBTUs to
27.3TBTUs.
􀂁 Blended re-gasification margins up marginally QoQ:
Blended re-gasification margins were up marginally
from Rs32.5/mmbtu to Rs32.7/mmbtu owing to
resetting of re-gasification margins from January 2011
onwards (5% yearly escalation). Going forward, Petronet
is likely to earn additional marketing margin for spot
volumes with subsequent increase in blended
re-gasification margins.