India`s Adani Total Gas posts Q3 profit fall on higher gas procurement charges
India's Adani Total Gas reported a 20% fall in third-quarter profit on Monday, hurt by higher gas purchase costs following lower supply from the government.
The Adani group company's consolidated profit fell 20% to 1.42 billion rupees ($16.4 million) in the three months ended Dec. 31, from a year ago.
The government had cut cheaper gas supplies to city gas distributors like Adani Total Gas in October and November, citing lower output, but later restored in January.
The company had to bridge the shortfall with costlier purchases of natural gas to ensure an uninterrupted supply of compressed natural gas (CNG) to end consumers, Adani Total Gas said in a statement.
The cost of procuring natural gas surged 20% year-on-year, Adani Total Gas said.
The gas distributor's CNG sales, which account for over half of its total sales volume, rose 19% during the quarter, while sales volume at the piped natural gas (PNG) segment increased 8%.
Revenue rose 12.6% to 14.01 billion rupees driven by higher sales volume.
The increase in natural gas supplies from the government from January should have a positive impact in the fourth quarter, the company said.
This is the first quarterly results since the company's JV partner TotalEnergies SE paused new investments into the Adani group of companies after a U.S. federal indictment against chairman Gautam Adani and others. The group has denied the charges and called them "baseless."
Shares of Adani Total Gas fell 3% after the results and have lost about 16% in January so far.
($1 = 86.3900 Indian rupees)
