BackONGC posts Rs4,416 crore Q4 net profit
ONGC reported revenue of `16,424 crore in the fourth quarter of FY2016, a 24.3% contraction from a year ago
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New Delhi: State-owned explorer Oil and Natural Gas Corp. Ltd (ONGC) reported on Thursday a 12.2% jump in net profit for the three months ended March to ₹ 4,416 crore, partly due to an accounting provision resulting from a rebound in oil prices.
The company wrote back part of the impairment charge it had made previously made when oil prices were lower. On Thursday, oil surpassed $50 a barrel for the first time in more than six months on signs a two-year surplus is coming to an end, Bloomberg reported. Brent crude is recovering after tumbling to a 12-year low in January.
ONGC reported revenue of ₹ 16,424 crore in the fourth quarter of FY2016, a 24.3% contraction from a year ago.
ONGC chairman D.K. Sarraf said the company had in the fiscal third quarter taken an impairment charge of ₹ 3,994 crore because of an oil price slump. The rise in oil prices led to a revision of the figure and the recognition of ₹ 752 crore in the profit statement.
In addition, the decision to develop the Krishna Godavari basin assets required recognising ₹ 1,585 crore in income, reversing a provision made earlier when the company had held the view that developing the field was un-viable, ONGC’s director (finance) A.K. Srinivasan said.
Also, the government has exempted the company from paying subsidy in the previous financial year in the form of discounts on oil sales to refiners, which had an impact on net profit to the tune of ₹ 350 crore in the fourth quarter, said Srinivasan.
In the full fiscal year, net profit declined 9.8% to ₹ 16,004 crore. ONGC reported a total dividend of 170% for the year. It produced 26 million tonnes of crude oil in 2015-16, same as a year ago and 22.5 billion cubic metres of gas, 4% lower than its output last year.
ONGC Videsh Ltd, the overseas arm of the company, slipped into the red for the first time in about a decade, reporting a loss of ₹ 2,094 crore in the 2015-16 fiscal on account of impairment provisions for some of its assets.
Sarraf said the company made 17 hydrocarbon discoveries in the last fiscal year and earmarked ₹ 30,000 crore for capital expenditure for the current fiscal year. “The new financial and operational norms for the 67 small fields to be auctioned falls within our parameters and we would be bidding for many of them," said Sarraf.
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