Ahead of its follow-on public offer (FPO), state-owned Oil and Natural Gas Corp. Ltd’s (ONGC) financial results for the quarter ended 31 December have surprised the Street positively.
The company received a one-time income of about Rs1,900 crore from the gas pool account for contributions made earlier. Higher year-on-year (y-o-y) other income and lower-than-expected depreciation cost (down 22% y-o-y), further boosted ONGC’s net profit.
Also See Improved Realizations (PDF)
The company had surprised the Street in the September quarter when depreciation cost increased by 87% y-o-y, as dry well write-offs had increased sharply.
Normally, dry well write-offs tend to rise in the second half of the fiscal. However, in the December quarter, the dry well write-offs was lower, the key reason for lower depreciation costs.
Reported net profit more than doubled to Rs7,080 crore, up 132% compared with the same period last year. Net profit adjusted for the impact of gas pool account stands at about Rs5,800 crore, higher than consensus estimates.
ONGC’s operating revenues increased by 21.5% y-o-y and 2% compared with the September quarter. Growth in revenue was helped by improved net realizations, which stood at $64.79 per barrel against $57.69 per barrel in the year-ago quarter last year and $62.75 per barrel in the September quarter.
Subsidy, a key element in the ONGC results, stood at Rs4,222 crore compared with Rs3,500 crore a year ago and Rs3,020 crore in the September quarter. The Panna-Mukta joint venture fields have resumed production, which has increased ONGC’s production.
ONGC’s stock has done well compared with the oil and gas index on the Bombay Stock Exchange and has also marginally outperformed the bellwether Sensex index since the beginning of the fiscal.
All eyes are now on the company’s FPO, which is likely in March.
Graphic by Ahmed Raza Khan/Mint
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