PETRONET LNG 2018-19 Annual Report Analysis

Sun, 31 Mar

PETRONET LNG has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

PETRONET LNG Income Statement Analysis

• Operating income during the year rose 25.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 0.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.6% in FY19 as against 10.8% in FY18.
• Depreciation charges decreased by 0.1% and finance costs decreased by 39.3% YoY, respectively.
• Other income grew by 40.5% YoY.
• Net profit for the year grew by 3.5% YoY.
• Net profit margins during the year declined from 6.8% in FY18 to 5.6% in FY19.

PETRONET LNG Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	305,986	383,954	25.5%
Other income	Rs m	3,174	4,458	40.5%
Total Revenues	Rs m	309,160	388,412	25.6%
Gross profit	Rs m	33,124	32,935	-0.6%
Depreciation	Rs m	4,117	4,112	-0.1%
Interest	Rs m	1,630	989	-39.3%
Profit before tax	Rs m	30,551	32,291	5.7%
Tax	Rs m	9,773	10,782	10.3%
Profit after tax	Rs m	20,779	21,509	3.5%
Gross profit margin	%	10.8	8.6
Effective tax rate	%	32.0	33.4
Net profit margin	%	6.8	5.6

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PETRONET LNG Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 25 billion as compared to Rs 29 billion in FY18, thereby witnessing an decrease of -13.1%.
• Long-term debt down at Rs 1 billion as compared to Rs 7 billion during FY18, a fall of 86.2%.
• Current assets fell 15% and stood at Rs 60 billion, while fixed assets fell 12% and stood at Rs 93 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 152 billion as against Rs 176 billion during FY18, thereby witnessing a fall of 13%.

PETRONET LNG Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	98,113	102,306	4.3
Current Liabilities	Rs m	28,602	24,844	-13.1
Long-term Debt	Rs m	7,334	1,012	-86.2
Total Liabilities	Rs m	175,995	152,493	-13.4
Current assets	Rs m	70,178	59,618	-15.0
Fixed Assets	Rs m	105,817	92,875	-12.2
Total Assets	Rs m	175,995	152,493	-13.4

PETRONET LNG Cash Flow Statement Analysis

• PETRONET LNG's cash flow from operating activities (CFO) during FY19 stood at Rs 21 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -715 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -25 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -5 billion from the Rs 4 billion net cash flows seen during FY18.

PETRONET LNG Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	29,956	21,414	-28.5%
Cash Flow from Investing Activities	Rs m	-12,776	-715	-
Cash Flow from Financing Activities	Rs m	-13,347	-25,476	-
Net Cash Flow	Rs m	3,833	-4,777	-

Current Valuations for PETRONET LNG

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 14.3, an improvement from the EPS of Rs 13.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 250.5, stands at 17.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.7 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 13.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	204.0	256.0
TTM Earnings per share	Rs	13.9	14.3
Diluted earnings per share	Rs	13.9	14.3
Price to Cash Flow	x	13.9	13.3
TTM P/E ratio	x	16.7	17.4
Price / Book Value ratio	x	5.0	3.3
Market Cap	Rs m	492,938	340,800
Dividends per share (Unadj.)	Rs	4.5	10.0

Ratio Analysis for PETRONET LNG

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.4x during FY19, from 2.5x during FY18. 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 33.6x during FY19, from 19.7x during FY18. 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 declined and down at 21.0% during FY19, from 21.2% during FY19. 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 32.2% during FY19, from 30.5% during FY18. 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 14.8% during FY19, from 12.7% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	2.5	2.4
Debtors’ Days	Days	191	131
Interest coverage	x	19.7	33.6
Debt to equity ratio	x	0.1	0.0
Return on assets	%	12.7	14.8
Return on equity	%	21.2	21.0
Return on capital employed	%	30.5	32.2

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 up from Rs 231.3 to Rs 250.5, registering a gain of Rs 19.2 or around 8.3%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 15,269.7 (up 0.9%). Over the last one year it has moved up from 14,614.4 to 15,269.7, a gain of 655 points (up 4.5%).

Overall, the S&P BSE SENSEX is up 16.3% 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