(Reuters) -India’s Adani Total Gas reported a drop in quarterly profit on Monday, as gas purchases became costlier after the government cut cheap supply.
The company, a joint venture of Adani Group and French oil major TotalEnergies SE, said its consolidated net profit fell about 3.8% from a year earlier to 1.65 billion rupees ($19 million) in the June quarter.
The Indian government in April reduced the allocation of low-cost natural gas to city gas distributors such as Adani Total Gas, citing a decline in domestic output by gas producers.
India’s natural gas production fell 0.9% year-on-year in April, and 3.6% and 2.8% in May and June, respectively.
To maintain uninterrupted supply, the company had to bridge the shortfall by sourcing more expensive natural gas.
The company’s natural gas costs rose 30.6%, leading to a 27% rise in its total expenses to 12.88 billion rupees.
Its CNG volumes, which account for more than half of its total sales, grew 21% during the quarter, as the company expanded its network.
Adani Total Gas added 3 new CNG stations during the quarter, taking its total to 650 as of June 30.
Sales volume in its piped natural gas segment grew by 6%.
Total revenue from operations rose 20.9% to 14.98 billion rupees.
Its shares closed nearly flat ahead of the results announcement.
($1 = 86.6630 Indian rupees)
(Reporting by Anuran Sadhu in Bengaluru; Editing by Devika Syamnath)
