ONGC Q3 profit beats estimates on writeback, forex gains

Tags: Companies
Oil and Natural Gas Corp beat expectations with a 28 percent rise in third-quarter profit on Thursday buoyed by a one-time provision writeback and forex gains from a weakened rupee.

However, a higher subsidies burden continues to squeeze margins on crude sales and raise concerns about the state company's ability to finance a major investment programme.

ONGC this week agreed to raise $2.5 billion in overseas debt to help fund the acquisition of a 10 percent stake in an offshore Mozambique gas block.

It is also looking to spend heavily to maintain output at ageing production fields in India.

"We are as concerned as you about our ageing fields. About three-fourths of our production comes from old fields of more than 30 years," Chairman Sudhir Vasudeva told reporters.

India's largest oil and gas exploration company posted net profit of 71.26 billion rupees for the quarter to December 31, up from 56.8 billion a year earlier.

Net sales fell 1 percent to 207.45 billion rupees.

Analysts on average had expected the company to post a net profit of 58.2 billion rupees on revenue of 223.7 billion, Thomson Reuters Starmine data showed.

With the crude oil it p[produces priced in dollars, ONGC made foreign exchange gains on an 11 percent depreciation in the rupee in 2013.

Its forex gains in the quarter amounted to 30.22 billion rupees, finance director Aloke Banerjee said.

The company also wrote back provisions amounting to 30.18 billion rupees in the quarter, he said.

India caps retail prices of diesel, cooking gas and kerosene and state explorers such as ONGC and Oil India (OILI.NS) are forced to sell crude to state refiners at a fixed discount to global prices.

ONGC's cost of helping subsidise domestic fuel prices rose 11 percent year on year to 137.64 billion rupees for the quarter. Lower international crude prices lowered its net realisation to $45.98 per barrel from $47.94 a year earlier.

Shares in ONGC, valued at $39 billion, closed down 3.4 percent ahead of the results. The stock has lost more than 5 percent in 2014 versus a 6 percent fall in the sectoral index.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Sebi must not be lax in weeding out mutual fund houses

    Last May, capital market regulator Securities and Exchange Board of India (Sebi) amended the Sebi (mutual funds) regulations, 1996, directing all fund

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

New model for effective education

After interacting with students and teaching community on a ...

Rajgopal Nidamboor

Let the spirit of sport pervade everyday life

Sport, like meditation, is nothing short of a spiritual act. ...

Shona Adhikari

Pop art is truly a feast for the eyes

The internationally reknowned Bruno Art Group’s presence in India had ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture