Government-owned ONGC on Thursday reported a 14.2% increase in its net profit in the April-June quarter at Rs 5,460 crore against Rs 4,782 crore in the same quarter previous year. The higher profit is partly on account of less subsidy burden. However, it missed estimates of a net profit of around Rs 5,800 crore.
“Oil production had been a matter of concern. But we have been able to arrest the decline in the previous quarter. In April-June, it in fact rose 2.2% to 5.227 million tonne,” said Dinesh K Sarraf, ONGC chairman and managing director.
On other hand, natural gas output dipped 3% to 5.482 billion cubic metre. “We are addressing as well and hopefully you will have some positive news by the fourth quarter,” Sarraf added.
ONGC benefited from the drastic fall in its subsidy bill, which the explorer forks out to compensate state-owned oil-marketing companies towards selling fuel below market cost. In Q1 FY16, subsidy burden stood at Rs 1,133 crore way below of Rs 13,200 crore in the same period previous year.
The subsidy outgo led to net profit being lower by Rs 628 crore, Sarraf said. The subsidy burden in Q1 FY15 had led to profit being lower by Rs 7,396 crore. The explorer reported a net realisation for selling crude oil in Q1FY16 at $58.92 a barrel against $47.15 a barrel. This was marginally lower than expectations of $60/barrel.
Operating profit (earnings before interest, tax, depreciation and amortisation) grew 19.4% y-o-y to Rs 10,582 crore. Revenue for the quarter was at Rs 22,825 crore, a growth of 4.5% over the year-ago period.