ONGC Q3 standalone profit slumps 67%; declares 35% dividend

Oil and Natural Gas Corporation (ONGC) has reported a standalone profit of Rs 1378.23 crore for the third quarter of the financial year 2020-2021. This is 67.39 per cent lower than the Rs 4226.45 crore standalone profit in the comparable year-ago quarter. Standalone total income also declined to Rs 18,242.21 crore from Rs 25,112.55 crore in the same period a year ago.

The ONGC Board has approved an interim dividend of 35 per cent (Rs 1.75 on each equity share of Rs 5). The total pay-out for this will be Rs 2,201.55 Crore. The record date for distribution of dividend has been fixed for February 20, 2021, the company said.

On a consolidated basis, the fall in profit and revenue was less steep. ONGC’s consolidated net profit for the quarter ending December 31, 2020, stood at Rs 3763.53 crore, down 31.06 per cent from Rs 5459.23 crore in the year-ago quarter. Consolidated total income stood at Rs 1,02,416.51 crore, down from Rs 1,11,225.46 crore in the year-ago quarter.

The consolidated results include the earnings of Hindustan Petroleum Corporation (HPCL), the petroleum refining and marketing public sector undertaking acquired by ONGC in 2018.

ONGC’s performance has been hit by the decline in crude oil prices as Covid-19 restrictions put pressure on global fuel demand during the months under review. The net realisation for the quarter ending December 31, 2021, stood at $43.91 a barrel, down from $58.24 a barrel in the quarter ending December 31, 2020. Gas prices were also slashed by the Centre to $1.79 per million British thermal units (mBtu), leading to losses that the company bore during natural gas exploration.

The ONGC Board also approved the formation of a subsidiary for its gas Business. The company said that this new wholly-owned subsidiary of the company will focus on gas and liquefied natural gas (LNG) business value chain, subject to necessary approvals.

“The Company is being formed with the objective of sourcing, marketing and trading of natural gas, LNG business, Hydrogen enriched CNG(HCNG), Gas to Power business, bio-energy/bio-gas/bio methane/other bio fuels business, among others,” a company statement said.

ONGC said that it too will be buying 5 per cent equity in the Indian Gas Exchange Ltd (IGX).

“As an important stakeholder in the gas sector, it would be critical for ONGC to participate at the Gas exchange for development of the gas sector. ONGC’s interests towards realizing maximum value from its gas marketing efforts may be substantiated through this first gas trading platform in the country,” ONGC said.

With this, ONGC has become the fourth strategic partner, and the second PSU, to hold a stake in IGX that was founded as a wholly-owned subsidiary of the Indian Energy Exchange (IEX). On January 22, IEX had announced strategic investments by Adani Total Gas and Torrent Gas in IGX that acquired 5 per cent stake each. Both had acquired this stake for ₹ 3.69 crore each. Earlier this month, GAIL (India) Limited, the other PSU in IGX, said that it too had bought 5 per cent stake.