Indian gas producer, Indus Gas (INDI) reported a step-up in its proven and probable (2P) reserves at the half-year stage but, with expansion being funded through borrowing, the growing debt burden is an issue. Indeed, the net debt pile has risen around 50 per cent year-on-year and the $475m (£295m) cost of servicing those loans in the half-year accounted for 60 per cent of operating cash-flow during the period.
The revised gross 2P estimate of 573bn cubic feet of gas (cfg) represents an 87 per cent increase on the estimates in 2010's Competent Person's Report (CPR). The group also revealed a 49 per cent hike in contingent resources to 2,699bn cfg and there has been no shortage of operational progress, either. Indus successfully completed the phase-2 ramp-up at its SGL field to the sales contract level of 33.5m square feet per day with all required production facilities fully operational. The group only began accruing revenues from the SGL field in October, so Indus anticipates a "significant uplift" during the second half. Indus is now exploring the possibility of signing-up the Indian state of Rajasthan’s electricity provider - RRVUNL - as a customer, too.
Broker Arden Partners expects adjusted full-year pre-tax profit of $7.9m, giving EPS of 4.33¢ (2012: $3m/1.66¢).
| INDUS GAS (INDI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,130p | MARKET VALUE: | £2.1bn | |
| TOUCH: | 1,110-1,1500p | 12-MONTH HIGH: | 1,110p | Low: 630p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 32¢* | NET DEBT: | 218% | |
| Half-year to 30 Sep | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 3.58 | -0.82 | nil | nil |
| 2012 | 2.95 | 0.60 | nil | nil |
| % change | -18 | - | - | - |
*Includes intangible assets of $57.7m, or 32¢ a share £1=$1.61 | ||||
