PETRONET LNG 2017-18 Annual Report Analysis

Sat, 31 Mar

PETRONET LNG has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

PETRONET LNG Income Statement Analysis

• Operating income during the year rose 24.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 27.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.8% in FY18 as against 10.5% in FY17.
• Depreciation charges increased by 11.5% and finance costs decreased by 22.3% YoY, respectively.
• Other income declined by 8.4% YoY.
• Net profit for the year grew by 21.8% YoY.
• Net profit margins during the year declined from 6.9% in FY17 to 6.8% in FY18.

PETRONET LNG Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	246,160	305,986	24.3%
Other income	Rs m	3,466	3,174	-8.4%
Total Revenues	Rs m	249,627	309,160	23.8%
Gross profit	Rs m	25,923	33,124	27.8%
Depreciation	Rs m	3,691	4,117	11.5%
Interest	Rs m	2,097	1,630	-22.3%
Profit before tax	Rs m	23,602	30,551	29.4%
Tax	Rs m	6,545	9,773	49.3%
Profit after tax	Rs m	17,057	20,779	21.8%
Gross profit margin	%	10.5	10.8
Effective tax rate	%	27.7	32.0
Net profit margin	%	6.9	6.8

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PETRONET LNG Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 29 billion as compared to Rs 45 billion in FY17, thereby witnessing an decrease of -36.6%.
• Long-term debt down at Rs 7 billion as compared to Rs 15 billion during FY17, a fall of 49.4%.
• Current assets fell 3% and stood at Rs 70 billion, while fixed assets rose 17% and stood at Rs 106 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 176 billion as against Rs 163 billion during FY17, thereby witnessing a growth of 8%.

PETRONET LNG Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	81,784	98,113	20.0
Current Liabilities	Rs m	45,130	28,602	-36.6
Long-term Debt	Rs m	14,500	7,334	-49.4
Total Liabilities	Rs m	162,640	175,995	8.2
Current assets	Rs m	72,530	70,178	-3.2
Fixed Assets	Rs m	90,110	105,817	17.4
Total Assets	Rs m	162,640	175,995	8.2

PETRONET LNG Cash Flow Statement Analysis

• PETRONET LNG's cash flow from operating activities (CFO) during FY18 stood at Rs 30 billion, an improvement of 44.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -13 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -13 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 4 billion from the Rs -19 billion net cash flows seen during FY17.

PETRONET LNG Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	20,676	29,956	44.9%
Cash Flow from Investing Activities	Rs m	-31,751	-12,776	-
Cash Flow from Financing Activities	Rs m	-7,482	-13,347	-
Net Cash Flow	Rs m	-18,557	3,833	-

Current Valuations for PETRONET LNG

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.9, an decline from the EPS of Rs 22.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 231.3, stands at 16.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.5 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 19.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	328.2	204.0
TTM Earnings per share	Rs	22.7	13.9
Diluted earnings per share	Rs	11.4	13.9
Price to Cash Flow	x	29.1	19.8
TTM P/E ratio	x	35.4	16.7
Price / Book Value ratio	x	3.0	5.0
Market Cap	Rs m	245,381	492,938
Dividends per share (Unadj.)	Rs	5.0	4.5

Ratio Analysis for PETRONET LNG

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.5x during FY18, from 1.6x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 19.7x during FY18, from 12.3x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 21.2% during FY18, from 20.9% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 30.5% during FY18, from 26.7% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 12.7% during FY18, from 11.8% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	1.6	2.5
Debtors’ Days	Days	180	191
Interest coverage	x	12.3	19.7
Debt to equity ratio	x	0.2	0.1
Return on assets	%	11.8	12.7
Return on equity	%	20.9	21.2
Return on capital employed	%	26.7	30.5

To see how PETRONET LNG has performed over the last 5 years, please visit here.

PETRONET LNG Share Price Performance

Over the last one year, PETRONET LNG share price has moved down from Rs 402.9 to Rs 231.3, registering a loss of Rs 171.6 or around 42.6%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 14,614.4 (up 0.1%). Over the last one year it has moved up from 13,563.6 to 14,614.4, a gain of 1,051 points (up 7.7%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for PETRONET LNG and quarterly results for PETRONET LNG)

Read: Latest Annual Report Analysis of PETRONET LNG