The share price of Great Eastern Energy (GEEC) has slumped alarmingly after the Indian rupee plunged to an all-time low against the dollar. The rupee’s decline meant that the interim out-turn for Great Eastern, an integrated coal bed methane producer on the subcontinent, was hit on two fronts: operating costs rose by nearly a fifth to $9.76m (£5.95m); while earnings were decimated by an $8.98m charge relating to negative currency movements on derivative instruments.
But the currency falls masked a largely creditable operating performance. Great Eastern’s revenues were up by 21 per cent on a constant currency basis, while net profits (pre mark-to-market adjustments) were up by two-thirds to $7.14m. Overall production capacity has increased by 23 per cent since the June full-year announcement to 21.3m cubic feet per day (cfpd). Shareholders can also take heart from the fact that average sales for last month hit 10.1m cfpd - a 40 per cent gain on the May performance.
Unfortunately, India’s currency woes also meant that Great Eastern received an average $10.40 per thousand cubic feet of gas (mcf), down from the 2013 full-year average of $12.20m/mcf, although Arden Partners point out that this "still represents a strong gas price versus other Indian operators and global companies".
| GREAT EASTERN ENERGY (GEEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 165p | MARKET VALUE: | £197m | |
| TOUCH: | 160-170p | 12-MONTH HIGH: | 274p | 165p |
| DIVIDEND YIELD: | nil | PE RATIO: | 49 | |
| NET ASSET VALUE: | 56¢ | NET DEBT: | 155% | |
| Half-year to 30 Sept | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 14.5 | 4.03 | 6.90 | nil |
| 2013 | 16.0 | 0.30 | 0.40 | nil |
| % change | +11 | - | - | - |
| £1 = $1.64 | ||||
