ONGC third quarter profit down 50% at Rs 3,571 cr

Slump in crude oil prices drive numbers down; total income lower by 9% at Rs 18,924 cr

A historic slump in crude oil prices has pulled down state-owned petroleum explorer Oil and Natural Gas Corporation’s (ONGC’s) net profit by 50 per cent for the October-December quarter.

The net profit dropped to Rs 3,571.2 crore during the quarter, compared to Rs 7,125.9 crore in the corresponding quarter of the previous financial year (2013-14). The company said profit was impacted by Rs 5,386 crore as a result of the discounts offered to downstream firms to part offset their under-recoveries.

“The company has shared the under-recoveries of OMCs for the nine months and the quarter-ended December by allowing discount on the price of crude oil, kerosene and domestic LPG,” ONGC said in a statement to the BSE.

The total income of the company also dipped 9.2 per cent to Rs 18,924 crore during the quarter as compared to Rs 20,852 crore in the same period last financial year. The sharing of subsidy burden impacted revenues by Rs 9,458 crore in the December quarter, ONGC said.

The company also reported a 17 per cent jump in total expenses at Rs 15,134 crore during the quarter ended December 2014 as against Rs 12,932 crore in the same quarter last year . In the third quarter last financial year (2013-14), the subsidy burden had impacted the profit by Rs 7,649 crore and revenue by Rs 13,764 crore.

OMCs’ total under-recoveries during the quarter stood at Rs 15,981 crore. Around a third of this — Rs 5,085 crore — is being compensated by the government while the rest two-thirds or Rs 10,900 crore is to be provided by the upstream firms. ONGC alone would have to bear over 80 per cent, or Rs 8,700 crore, of the upstream burden.

ONGC’s share price at the BSE had closed on Friday at Rs 339.9, down 1.9 per cent as compared to previous close.