Gail posts 64 rise in net profit

NEW DELHI, May 30: The Gas Authority of India Limited GAIL has posted a 64.5 per cent increase in net profit, but only a 26 per cent rise ...

NEW DELHI, May 30: The Gas Authority of India Limited GAIL has posted a 64.5 per cent increase in net profit, but only a 26 per cent rise in sales in the first year of free gas pricing.

The board of directors, which met in the capital on Saturday, recommended 20 per cent dividend for the 1997-98 fiscal, compared to 15 per cent declared in the previous year. The year before, in 1995-96, GAIL had paid a 10 per cent dividend on its shares, nearly 97 per cent of which belong to the government of India.

GAIL, which is in the business of transporting natural gas, earned Rs 5731 crore from sales last year, compared to Rs 4541 crore in 1996-97. Other income contributed Rs 662 crore to the GAIL turnover, which was a whopping 46 per cent more than in 1996-97.

The total income of the company, consequently went up to Rs 6393 crore, from Rs 4992 crore in 1996-97, a hike of 28 per cent. A modest increase in interest, depreciation and tax later, GAIL earned a profit after tax of Rs 1020 crore, which was 64.5 percent higher than in the previous fiscal.

The company generated gross internal resources of Rs 1269 crore last year, compared to Rs 854 crore in 1996-97. The linking of natural gas prices to a basket of internationally traded fuel oils, has enabled GAIL to claim a price adjustment every quarter.

The plunge in oil prices worldwide, however, converted the boon of free pricing into a bane and gas prices in March reverted back to December 1997 levels. The slight firming up of petroleum products prices worldwide, is expected to result in better gas prices for GAIL in the quarter beginning next month. According to a GAIL release, the company completed 99 per cent of the work at its petrochemicals project, at Auraiya in Uttar Pradesh. The Gas Authority of India, which has already begun producing and distributing liquefied petroleum gas LPG in Assam, Maharashtra and Uttar Pradesh, also began producing ethane and propane at Auraiya.

The gas processing unit of the petrochemicals plant has been commissioned andthe gas cracker is expected to be operational soon. During the year gone by GAIL began distributing domestic cooking gas in the capital. It also began installing compressors at Hazira and Vaghodia for the Hazira-Bijaipur-Jagdishpur pipeline.