Adani Total Gas, India's largest gas company, reports a Q3 profit decline due to higher gas procurement costs

Adani Total Gas, a company in India, reported on Monday a 20% drop in its third-quarter profits. This was due to higher gas costs after the government cut back supply.

Adani Group's profit fell by 20% in the three-month period ended December 31, to 1.42 billion rupees (about $16.4 million), compared with a year earlier. In October and November the government cut off cheaper gas supplies for city gas distributors such as Adani Total Gas, citing a lower production, but restored them in January.

Adani Total Gas stated in a press release that the company was forced to make more expensive purchases of natural gases to maintain an uninterrupted supply to consumers of compressed natural gasoline (CNG).

Adani Total Gas reported that the cost of obtaining natural gas has increased by 20% in comparison to last year. CNG sales for the gas distributor, which make up over half of the total volume of sales, increased 19% in the first quarter. Sales volume at the PNG segment also rose 8%. Sales volume drove a 12.6% increase in revenue to 14.01 billion rupies.

The company stated that the increase in natural-gas supplies from the government since January should have had a positive effect on the fourth quarter. The company said that this is the first quarter's results since its JV partner TotalEnergies SE stopped new investments in the Adani Group of Companies after an U.S. Federal indictment was filed against Gautam Adani, chairman of the Adani Group. The group has called the allegations "baseless" and denied them.

Adani Total Gas shares fell by 3% following the results. They have now lost 16% of their value in January.

(source: Reuters)