(MENAFN- Khaleej Times) Oil and Natural Gas Corporation, India's biggest energy explorer, reported a fourth consecutive quarter of lower profit after it sold crude to state-run refiners at steeper discounts.
Net income fell 34 per cent to Rs40.2 billion ($659 million) in the three months ended June 30 from Rs60.8 billion a year earlier, according to a stock exchange filing today. That missed the Rs49.3 billion median estimate of 36 analysts surveyed by Bloomberg. Sales fell 4.3 per cent to Rs192.2 billion.
Prime Minister Manmohan Singh's government is asking state- controlled oil explorers ONGC and Oil India Ltd. to bear a larger portion of the revenue losses state-run refiners incur on selling fuels below the cost of production to help curb inflation. The higher subsidy is cutting the cash reserves of the explorers and putting pressure on capital expenditure plans, according to Oil India Finance Director T.K. Ananth Kumar.
Total cost surged 21 per cent to Rs147 billion, while other expenses increased 44 per cent to Rs45.8 billion, according to the filing. The total tax expenditure declined 38 per cent to Rs17.68 billion.
ONGC rose 1.8 per cent to Rs278.10 in Mumbai. The shares have gained 3.8 per cent this year, compared with a 2.5 per cent drop in the benchmark S&P BSE Sensex index. The earnings were announced after trading ended.
The explorer gave Rs126.2 billion of discounts to refiners including Indian Oil Corporation in the quarter, compared with Rs123.5 billion a year earlier, according to the statement.
Lower oil prices in the quarter also eroded earnings. The price of Brent crude, a benchmark for more than half of the world's oil, fell five per cent to an average $103.35 in the quarter, compared with a year earlier.
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