Cairn India Q2 profit jump 139% on accounting regime change
New Delhi: Cairn India Ltd on Friday reported a 139% jump in its September quarter net profit to Rs779 crore, the highest in six quarters, on account of cost savings and a restatement of previous comparable quarter profits.
To reconcile with the Ind-AS accounting standards that large and listed companies have to follow from 1 April, 2016, Cairn’s September quarter net profit for 2015-16 has been restated to Rs326 crore, from Rs672.67 reported earlier.
Restatement of previous comparable period figures is meant to facilitate comparison during the transition period.
Ind-AS is based on fair market valuation of assets and liabilities, unlike the earlier Indian Generally Accepted Accounting Principles (GAAP), which was based on principles of prudence that large and listed companies followed till last financial year.
Cairn informed stock exchanges that its total income from operations declined 9% to Rs2,039 crore in the second quarter of 2016-17 from Rs2,242 crore in the same period a year ago.
A foreign exchange gain of Rs64 crore in the quarter under review against a forex loss of Rs94 crore in the September quarter of 2015-16 also helped to improve profits. Cairn’s total expenses in the September quarter of 2016 dropped by 18% to Rs1,781 crore.
Earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rs1,039 crore in the quarter under review, compared to Rs973 crore a year ago.
Cairn India acting chief executive officer Sudhir Mathur described the second quarter as a “challenging oil price environment”.
“This is the highest quarterly profit for the company over the past six quarters and is reflective of our industry-leading technological and operational capabilities,” a company statement said, quoting Mathur.