ONGC net profit drops 40% in March quarter

Oil output fell to 5.62 million tonnes in Q4 from 5.78 million tonnes a year ago

State-run Oil and Natural Gas Corp Ltd (ONGC) has posted a 40 per cent drop in net profit for the quarter ended March 31 to Rs 3,387 crore, compared with Rs 5,644 crore a year ago.  

The drop in net profit is basically due to higher share of levies that the firm has suffered during the quarter. The company’s net sales for the quarter zoomed 14 per cent to Rs 21,388 crore against Rs 18,819 crore in the year-ago period.

“The drop in net profit is mainly due to a cess on crude oil and royalty payments. The government had increased the cess on crude oil to Rs 4,500 per tonne, while it was much lower at Rs 2,500 tonne last year. Some additional provisions of Rs 1,698 crore were also there for employees benefit,” said A K Banerjee, director of finance, ONGC. However, under-recoveries decreased to Rs 12,312 crore in the March quarter versus Rs 14,170 crore a year ago.

ONGC’s net profit for the entire financial year 2012-13 decreased 16.7 per cent to Rs 20,926 crore from Rs 25,123 crore the year before. During 2012-13, under-recoveries increased 11.1 per cent to Rs 49,421 crore.

“The impact on net profit of subsidies for the entire financial year was about Rs 28,413 crore. For the (March) quarter, the impact was around Rs 6,900 crore,” said Sudhir Vasudeva, chairman and managing director of ONGC.

For the current financial year, the company has lined up a capital expenditure plan of Rs 35,049 crore, while it was Rs 29,503 crore for FY13.

During the financial year, the domestic production of crude oil and natural gas saw a decline. Domestic crude oil output dropped to 26.12 million tonnes (mt) in 2012-13, compared with 26.92 mt the year before. On the other hand, natural gas production dropped to 25.33 billion cubic metres against 25.52 in the previous year.  

ONGC’s stock gained 0.21 per cent to Rs 334 today on BSE, while the benchmark Sensex shed 0.07 per cent to 20,147.64 points.