Aban Offshore Ltd, Asia’s largest offshore drilling service provider, has reported a 35% increase in profit for the quarter ended March 2007 despite sales dropping marginally, mainly on account of an increase in other income.
The company’s results does not include that of its subsidiary in Singapore and its recent acquisition, Norwegian firm, Sinvest ASA.
In the three months ended March 2007, Aban, through its subsidiaries, has acquired a 100% stake in the Norwegian company. With demand for rigs, used in deep-sea oil exploration, continuing to outstrip supply, and exploration activity heating up off India’s eastern coast, Aban’s sales could increase in the future.
“The fleet strength of the stand-alone company has remained the same,” said Ajit Motwani, an analyst at Emkay Research, a stock broking firm.
“The decline in sales income is mainly because of appreciation of the Indian rupee against the US dollar”.
Five out of seven rigs operated by Aban Offshore are with the Oil and Natural Gas Corp. (ONGC) and the day rates—the charge for using the rig for a day—were contracted on dollar rates, said Motwani. So, when the rupee gained against the US dollar, sales income in Indian rupee dropped, he added. Company officials couldn’t be reached for comments.
Sales during the quarter ended March 2007 was Rs119 crore, as against Rs120 crore a year earlier. Net income increased by Rs8 crore to Rs30 crore. Other income rose to Rs35 crore in the fourth quarter ended March 2007, as against Rs4 crore in the corresponding quarter last year.
For the year ended March 2007, Aban Offshore reported a 9% jump in net profit to Rs92 crore, as against Rs84 crore for the year ended March 2006. Sales grew marginally to Rs498 crore, up from Rs490 crore in the previous 12 months ended March 2006. Other income more than tripled to Rs59 crore in the financial year ended March 2007.