Despite a slump in crude oil prices, state-run explorer ONGC reported a 12.2% rise in its fourth quarter net profit at R4,416 crore in FY16, against R3,935 crore in the same quarter previous year. The explorer did not bear any subsidy burden in the period; rather, the government credited R633 crore back to it, for the subsidy borne in the previous quarters.
ONGC chairman & managing director D K Sarraf said after the board meeting that the higher quarterly profit is due to a reversal of provisions and compensation for the subsidy burden of the previous quarters. ONGC’s performance is above street estimates also on account of a write-back on impairment cost. “Due to a lack of operational triggers and a weak crude oil price scenario, the stock will remain under pressure in the near term. However, the stock has corrected 34% in last one year, which protects the downside risk from current level of R214,” said Dhaval Joshi, an analyst at Emkay Global Financial Services.
The gross revenue during January-March 2016 fell 24.3% to R16,424 crore against R21,683 crore in the same months last year. The crude oil price realized by ONGC in Q4 of FY16 stood at $34.88, and it did not share any oil susbisy burden in the quarter. In the last quarter of FY15, ONGC sold every barrel of crude oil at $55.63.
In the complete year of 2015-16, ONGC’s net profit dropped by 9.8% to R16,004 crore against R17,733 crore in FY15. The gross revenues in FY16 fell 5.4% to R78,569 crore against R83,094 crore in FY15.
The government-owned explorer drilled 22.368 million tonnes (mt) of crude oil in FY16, against 22.264 mt in FY15. Offshore fields, particularly in the western region, performed well and produced 100.3% of the crude production target from such fields in FY16. Offshore oil production has gone up by 2.1% rising from 16.19 mt in FY15 to 16.54 mt in FY16.
However, the gas production scenario continues to be grim with output falling to 21.2 billion cubic metres (bcm) in FY16 from 22.02 bcm in FY15. ONGC’s total crude oil production including its share in joint ventures projects during FY16 was 25.93 mt, marginally less against 25.94 mt during FY15.
The company’s board on Thursday recommended final dividend of 65% in addition to interim dividend of 105% paid earlier, making the total dividend for FY16 at 170%. This is against 190% in FY15.