Cairn India Q3 net profit soars multi-fold to Rs 604 cr

Reports Ebitda of Rs 1,067 cr, which is highest in past six quarters

Cairn India Ltd on Thursday reported a consolidated net profit of Rs 604 crore, substantially higher on year on year basis owing to lower depreciation charges seen in the reported quarter.

For the October-December 2016 quarter, the company reported a net profit of Rs 604 crore, multiple times higher from the Rs 40.90 crore net profit reported in the same period a year back. 

Net revenue in the same period rose 5% year-on-year to Rs 2,149 crore from Rs 2,039 crore. “Net profit after tax was 22% lower quarter-on-quarter (QoQ) at Rs 604 crore due to forex loss and higher effective tax rate which was partially offset by higher Ebitda (Earnings before interest, tax, depreciation and amortisation) and lower depreciation,” the company said in its statement.

Expenses for the December quarter was lower at Rs 1,791.65 crore from Rs 2,345.52 crore reported in the same period a year back. Lower expenses were mainly on account of lower depletion, depreciation and amortisation expenses.

The company reported Ebitda of Rs 1,067 crore which is the highest in past six quarters. "Ebitda for the quarter increased by 3% QoQ to Rs 1,067 crore as margin remained firm at 50%, mainly on account of higher revenue. DD&A (Depreciation, depletion and amortisation) charges accounted on the unit of production basis were lower by 7% QoQ to Rs 726 crore due to lower production on account of planned maintenance shut down. Other income remained firm at Rs 524 crore positively impacted by further softening of interest rate. Forex loss was at Rs 79 crore due to 1.9% depreciation in Rupee versus US Dollar on closing basis,” the company said in its statement to Bombay Stock Exchange.

On the proposed merger of Vedanta Limited and Cairn India the company said it expects the transaction to complete in the March quarter of the calendar year 2017.

On the road ahead, Sudhir Mathur, acting chief executive officer of Cairn India said: “We have made use of the challenging oil price environment to achieve competitive returns even at Brent $40 per barrel for planned projects. We are in active discussions with world class oil field services companies to partner for the end to end outsourcing of certain projects. This would help us further optimise costs, expedite project execution through better vendor coordination, and act as a force multiplier, allowing us to target a larger number of projects simultaneously.”

On its operations, the company in its statement added, during the quarter the company’s  gross production was at 16.7 million barrels of oil equivalent (mmboe) across all the assets, of which working interest production was 10.7 mmboe.