(Reuters) -India’s Adani Total Gas reported a decline in second-quarter profit on Tuesday, as elevated costs from pricier gas imports weighed on earnings after the government cut cheaper supply.
The city gas distributor, a joint venture between Adani Group and French energy major TotalEnergies, said its consolidated net profit fell 12% to 1.63 billion rupees ($18.5 million) in the three months ended September.
In April, the Indian government reduced the allocation of low-cost natural gas to distributors, prompting companies to rely on pricier gas imports. The impact of this policy change continued into the second quarter. The company’s natural gas costs rose 29%, leading to a 26% rise in total expenses to 13.69 billion rupees.
India’s natural gas production declined for the third straight month, falling 3.8% year-on-year in September.
Adani Total Gas is closely monitoring “the evolving situation” regarding allocation, Chief Executive Suresh P Manglani said in a statement. Revenue from operations rose 19.6% to 15.76 billion rupees, aided by an 18% increase in sales volumes of compressed natural gas, which accounts for more than half of total sales volumes.
Shares of Adani Total Gas ended 0.3% higher ahead of its results.
($1 = 87.8950 Indian rupees)
(Reporting by Manvi Pant and Hritam Mukherjee in Bengaluru, Editing by Sonia Cheema)
