Profitability will improve in H2, due to increased utilization at kochi and new capacity of Haldia. Apart from that, next year we will see quarter on quarter improvement in earnings due to starting of Pipavav capacity in phased manner which is already booked and gas division will also perform well since management is confident of adding good numbers of dealers and new autogas stations in second half which will improve next years gas divisions (B2C) performance
Liquid Terminal Division:
Kochi Liquid terminal division is currently operating at 75% which will be operating at 85% in Q4 FY14 with the new jetty commissioned in Nov 2013. Co has already handled a large methanol cargo through that jetty.
Haldia terminal is part commissioned with 15000 KL operated in Q2 FY14 (total 60000 KL). Balance 23400 KL will be operational in Q3 FY14 and 21600 KL in Q4 FY14.Co has signed a 15 year contract at the Haldia terminal of 15000 KL which is equivalent to 25% of the capacity.
Pipavav terminal of 120000 KL will be operational in Q1 FY15 with a capex of INR 120 cr. of this 45 cr is already spend through internal accruals. Mgt is confident of cost savings in Pipavav project cost a case in example is Haldia where initially project cost was INR 65 cr and co completed the project at INR 48 cr. Entire capacity of 120000 KL is fully sold and booked.
Realizations at each of the terminal:
o Mumbai: INR 250-260/KL/month
o Kochi: INR 100-125/KL/month
o Haldia: INR 140-150/KL/month
o Pipavav: INR 180/KL/month
Gas division business:
ü Gas volumes handled by the co. at its own terminal at Mumbai and Pipavav was 154856 MT in Q2 FY14 as against 125565 MT in Q1 FY14. This is against 184124 MT in Q1 FY13 and 139922 MT in Q2 FY13. Mgt has given guidance of 400000 MT for gas volume handled at its both the terminal however in H1 FY14 co has already done 280421 MT. Management reiterated that order book for Q3 FY14 is similar to those of Q2 FY14. Co charges throughput and storage fees of INR 700-1000/MT on the volumes handled.
ü Gas volumes on which co earns sourcing fee of $3-5/MT was 255265 MT in Q2 FY14 as against 141000 MT in Q1 FY14. This is against 259276 MT in Q1 FY13 and 145815 MT in Q2 FY13.Management has given guidance of 450000 MT. however in H1 FY14 co has already done the volumes of 396392 MT. Management reiterated that order book for Q3 FY14 is similar to those of Q2 FY14.
ü Auto Gas (Retail stations) volumes were 5480 MT as against 5773 MT in Q1 FY14. Volumes were down QoQ mainly because 3 of the stations were under repairs and maintenance. Mgt has guided for 30000 MT of volumes for FY14.In Q3 FY14, co will commission 4 company owned stations (CODO’s) which are the flagship stations at Bangalore and also 3 of the stations which were under repairs will also be under operation in Q3 FY14. Co has 94 stations operational in Q2 FY14 which is same as Q1 FY14.
ü Commercial and Industrial gas segment volumes were 7063 MT in Q2 FY14 as against 8019 MT in Q1 FY14. Co earns a EBIDTA margin of INR 2000-2500/MT in this segment. Co currently has 45 dealers with it (sales per dealer at 20-30 MT per month). Mgt expects to have dealer network of 80 by March 2014.
ü For Gas terminal division, mgt has given guidance of INR 85 cr. of EBIDTA in FY14. However co has done EBIDTA of INR 30 cr. in H1 FY14. co may fall short of the guidance in gas division mainly because of the delay in permission for the Auto Gas stations which is the high margin business and also lower than expected sales in Bulk Industrial gas segment due to general industrial slowdown.
The key highlights are as below:
Rs. Crores
|
Q2 FY14
|
Q1 FY14
|
Q-o-Q
|
H1FY14
|
FY2013
|
Revenue
|
1,563
|
806
|
94%
|
2,369
|
3,982
|
Normalized EBITDA (Segment)
|
38
|
34
|
10%
|
72
|
156
|
Finance, Hedging & Forex Exp.
|
1
|
3
|
4
|
62
| |
Profit before Tax
|
25
|
20
|
27%
|
45
|
53
|
Profit after Tax
|
22
|
16
|
42%
|
38
|
35
|
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