BENGALURU, November 4 (Reuters) – GAIL (India) Ltd (GAIL.NS)the country’s largest gas distributor, reported a bigger-than-expected 46.3% drop in quarterly profit on Friday, hit by weak gas sales due to supply disruptions from an old unit of the Russian energy giant Gazprom.
The company’s stand-alone profit fell to 15.37 billion Indian rupees ($186.24 million) in the July-September quarter from 28.63 billion rupees a year earlier.
Analysts on average had expected GAIL’s profit to fall to Rs 20.80 billion, according to Refinitiv IBES data.
Still, GAIL’s operating revenue rose 78.9% to 384.91 billion rupees, as price increases for fertilizers and industrial customers helped offset weak sales volumes.
“Due to ongoing geopolitics, there has been an LNG supply disruption from one of the company’s long-term LNG suppliers,” GAIL said in a statement.
Reuters had reported that GAIL had to limit its LNG supplies as a long-term partner GMTS, a former unit of Russian state-owned Gazprom (GAZP.MM), has not delivered cargo since May. A fifth of GAIL’s total LNG volume from overseas was obtained by Gazprom.
GAIL entered into a 20-year agreement with Gazprom Marketing and Singapore (GMTS) in 2012 for annual purchases of an average of 2.5 million tonnes of LNG.
At the time, GMTS was a unit of Gazprom Germania, but the Russian parent company relinquished ownership of Gazprom Germania after Western sanctions following the Russian invasion of Ukraine.
GAIL signed an agreement with Abu Dhabi National Oil Co, or ADNOC (ADNOC.UL), earlier this week to explore short- and long-term LNG supplies.
Shares of the company fell more than 2.5% after Friday’s results, trimming their gains for the year to around 21%. ($1 = 82.5300 Indian rupees)
Reporting by Biplob Kumar Das in Bangalore
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