Oil & Natural Gas Corp.’s quarterly profit fell by more than half as expenditure and tax rose.
Net profit of the oil and gas explorer fell 52.1% quarter-on-quarter to Rs 1,378.23 crore in the quarter ended December, according to an exchange filing. That compares with the Rs 2,291.6-crore consensus estimate of analysts tracked by Bloomberg.
That came as total expenditure increased 11% over the preceding three months, led by a rise in statutory levies, exploration and finance costs. Besides, total tax expense for the reported quarter stood at Rs 1,443.01 crore, a 29.7% increase over the July-September period.
Key Highlights (QoQ)
- Revenue rose 0.6% to Rs 17,023.8 crore, compared with the Rs 16,958.9-crore estimated.
- Operating profit fell 6.9% to Rs 6,507.6 crore.
- Other income fell 45.5% to Rs 1218.4 crore.
- Operating margin contracted to 38.2% from 41.3%.
An increase in crude oil prices in the third quarter aided ONGC’s realisation. But that was partly offset by a 25% drop in domestic prices of natural gas from Oct. 1.
Prices of the benchmark Brent crude rose 4.4% sequentially to $44.6 per barrel, and closed at $51.2 per barrel on Dec. 31. Domestic prices of natural gas—which are based on a formula that’s revised bi-annually—stood at $1.8 per million British thermal units in the second half of the ongoing fiscal from $3.2 per mmBtu a year earlier.
ONGC’s crude oil production in December was 4.74% lower than the 1,785.15-thousand-metric-tonnes target, and fell 2.75% from the preceding year, according to data released by the Ministry of Petroleum & Natural Gas. Its natural gas production was 9.52% lower than the 2,053.29 mmscm target, and fell 7.04% year-on-year in December.
The company’s cumulative crude oil and natural gas production during April-December 2020 fell 1.16% and 7.64%, year-on-year, respectively.