Crude oil slump shaves 99% off Cairn's Q3 net

Firm delivers a mere Rs 9 cr from Rs 1,350 cr a year earlier, as lower output from Rajasthan fields compounds woes

Cairn India has recorded a 99 per cent drop in its consolidated net profit at Rs 9 crore for the quarter ended December, against a net profit of Rs 1,349.64 crore in quarter ended December 2014. Fall in crude oil price combined with lower production from its Rajasthan fields impacted the company’s earnings. The Vedanta group company’s net revenue also fell 42 per cent to Rs 2,039 crore, compared to Rs 3,504 crore in the same quarter last year.

“Net revenue decreased mainly due to a sharp decline of 13 per cent in crude prices and increase in discount to Brent for Rajasthan crude to $9.2 per barrel. Our average realisation came down to $35.2 per barrel, as realisation for Rajasthan crude $34.5 per barrel,” Cairn India said.

“We maintain our strategic objective of generating healthy free cash flow which has been successfully guiding us through the constantly deteriorating oil pricing scenario," said Mayank Ashar, managing director and chief executive officer, Cairn India.

On Friday, Cairn India’s scrip closed at Rs 112.90, up 2.64 per cent on the BSE. The company announced its earnings after market hours.

Cairn India’s average realisation came down by 19 per cent sequentially to $35.2 per barrel, as realisation for Rajasthan crude reduced to $34.5 per barrel.

Ebitda (earnings before interest, taxes, depreciation and amortisation) for the quarter came in at Rs 665 crore with an Ebitda margin of 33 per cent. Lower revenue and increase in the overall operating cost led to decline in Ebitda.

Discount on Rajasthan Brent went up from $7.2 per barrel to $9.2 per barrel, quarter-on-quarter, the company said.  

Net capital expenditure for the second quarter stood at Rs 386 crore, with 70 per cent of the investment made on development projects and 30 per cent on exploration activities.

Cairn’s closing cash and cash equivalent position was at Rs 18,470 crore, of which 68 per cent is invested in rupee funds and 32 per cent in dollar funds.