ONGC slips as Q4 net declines on higher subsidy burden

The PSU oil exploration major reported 40% decline in net profit for the fourth quarter ended March 31, 2013, to Rs 3,387 crore

Shares of ONGC were down nearly 2% after it reported 40% decline in net profit for the fourth quarter ended March 31, 2013, to Rs 3,387 crore, compared with Rs 5,644 crore a year ago on account of higher share of subsidies.

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.

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.

Over 800,000 shares were traded on both the stock exchanges so far.