The company informed exchanges about a disruption in gas supplies due to the ongoing war in the Middle East. It added that the availability of R-LNG has become severely constrained amid the prevailing geopolitical situation, impacting the gas supply scenario.
The company also clarified that acts of war are not covered under the insurance policy it holds. It added that since the Force Majeure is an ongoing event, the likely financial impact cannot be estimated at this stage. Gujarat Gas said it is closely monitoring developments and will keep stock exchanges informed of any material updates.
It is the second company in the energy space to invoke Force Majeure amid the ongoing geopolitical tensions. On March 3, Petronet LNG issued a Force Majeure notice to QatarEnergy in relation to its LNG tankers, Disha, Raahi and Aseem. At the same time, QatarEnergy, which supplies LNG to the company, has also flagged a potential Force Majeure event citing the continuing hostilities in the region.
Force majeure, a French term meaning “superior force”, is a standard contractual provision that releases parties from liability or performance obligations when an exceptional and unforeseeable event beyond their control, such as war, strikes, riots, crime, epidemics or natural disasters, makes it impossible to fulfil agreed contractual commitments.
Gujarat Gas Q3 snapshot
The company reported a 5.6% QoQ decline in volumes for the December quarter, which was slightly better than market expectations of a 7% to 8% drop. On a sequential basis, revenue fell 3.2% to Rs 3,658 crore from Rs 3,781 crore. EBITDA remained largely flat at Rs 447 crore compared with Rs 448 crore in the previous quarter.
Net profit for the December quarter came in at Rs 267 crore, down 4.6% from Rs 280 crore reported in the September quarter.
Gujarat Gas recorded an 11% sequential increase in CNG volumes to 3.45 mmscmd during the quarter. In contrast, industrial volumes declined 19.7% from the previous quarter to 3.93 mmscmd.
Operating profit margin improved by 30 basis points on a sequential basis to 12.2%, compared with 11.9% in the September quarter.
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