GAIL (India) Ltd, the country's largest gas distributor, reported a bigger-than-expected 46.3% fall in quarterly profit on Friday, hit by low gas sales due to supply disruptions from a former unit of Russian energy giant Gazprom.
The company' standalone profit tumbled 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 drop to 20.80 billion rupees, according to Refinitiv IBES data.
Still, GAIL's revenue from operations rose 78.9% to 384.91 billion rupees as price hikes to fertiliser and industrial clients helped offset low sales volumes.
"Due to ongoing geopolitics, there has been disruption in LNG cargo supplies by one of the company's long-term LNG supplier," GAIL said in a statement.
Reuters had reported GAIL had to curb LNG supplies as long-term partner GMTS, a former unit of Russia's state-owned Gazprom, failed to deliver cargoes since May. One-fifth of GAIL's total volume of LNG from overseas was secured by Gazprom.
GAIL agreed a 20-year deal with Gazprom Marketing and Singapore (GMTS) in 2012 for annual purchases of an average 2.5 million tonnes of LNG.
At the time, GMTS was a unit of Gazprom Germania, now called Sefe, but the Russian parent gave up ownership of Sefe after Western sanctions over Russia's invasion of Ukraine.
So far Sefe has not supplied 17 cargoes, equivalent to about 8.5-9 million cubic metres a day, said R.K. Jain, head of finance at GAIL.
Apart from cutting customer supplies, GAIL has reduced operations at its petrochemical plant.
Jain said GAIL bought 1-1.5 cargoes of LNG from spot markets last quarter and could buy similar quantities this quarter to meet local demand.
GAIL signed a deal with Abu Dhabi National Oil Co, or ADNOC, earlier this week to explore short- and long-term LNG supplies.
The company's shares closed down 2.2% on Friday. ($1 = 82.5300 Indian rupees)
