The rupee’s 5.3% surge against the dollar in the quarter reduced the value of Cairn India’s earnings from selling crude oil, which it prices in the U.S. currency.  (The rupee’s 5.3% surge against the dollar in the quarter reduced the value of Cairn India’s earnings from selling crude oil, which it prices in the U.S. currency. )
The rupee’s 5.3% surge against the dollar in the quarter reduced the value of Cairn India’s earnings from selling crude oil, which it prices in the U.S. currency.
(The rupee’s 5.3% surge against the dollar in the quarter reduced the value of Cairn India’s earnings from selling crude oil, which it prices in the U.S. currency. )

Cairn India net misses estimates, sales rise 68%

Net income at Cairn India and its units rose more than threefold to `2,320 crore ($434 million)

New Delhi: Cairn India Ltd., operator of India’s biggest oilfield on land, reported second-quarter profit that missed analysts’ estimates after it sold crude at lower prices and a stronger rupee eroded earnings.

Net income at Cairn India and its units rose more than threefold to 2,320 crore ($434 million), or 12.15 a share, in the three months ended 30 September, the Gurgaon-based company said in a regulatory filing on Monday. That missed the 2,790 crore median estimate of 31 analysts surveyed by Bloomberg. Sales rose 68% to 4,440 crore.

The rupee’s 5.3% surge against the dollar in the quarter reduced the value of Cairn India’s earnings from selling crude oil, which it prices in the U.S. currency. Production from the explorer’s biggest field in Rajasthan has remained almost stagnant this year as it awaits government approvals and expansion of a pipeline to carry oil to the coast.

“Cairn is currently constrained by its crude handling capacity, including the pipeline," said Neelabh Sharma, a Mumbai-based analyst with BOB Capital Markets Ltd., a unit of state-run Bank of Baroda. Investors will wait for guidance on timelines for when capacity at the Rajasthan crude handling facilities can be increased. Sharma has a reduce rating on the Cairn India stock.

The shares rose 1.26% to 337.8 at the close on BSE before the earnings announcement.

Forex Loss

The company lost 786 crore because of the rupee’s rise against the dollar in the three months, compared with a gain of 531 crore in the same period a year earlier, according to an e-mailed statement on Monday.

The explorer’s share of production from fields in India was 129,431 barrels of oil equivalent a day in the quarter ended 30 September, compared with 99,220 barrels a day a year earlier and 127,226 barrels a day in the preceding quarter, the company said in the statement. Net production from the Rajasthan field averaged 120,261 barrel of oil equivalent per day in the three months, compared with 87,676 barrels a day a year earlier and 117,002 barrels a day a quarter earlier.

The company sold its oil and gas at an average $96.7 a barrel in the quarter, 3.6% lower than a year earlier, according to Monday’s statements. The average price of Brent traded in London fell 2.7% to $109.42 a barrel in the quarter from a year earlier.

Bhagyam Field


Increasing the capacity of the pipeline is in progress and technical tests have been completed, according to Monday’s statement. A report has been submitted to the venture operating the field and once approved, production from the Bhagyam field in Rajasthan can increase to 40,000 barrels a day from the current 25,000 barrels a day, according to Cairn India.

Cairn India owns 70% stake in the Rajasthan oil block, which has the potential to produce as much as 300,000 barrels a day, according to the company. State-run Oil & Natural Gas Corp. Ltd owns the rest.

Vedanta Resources Plc, a London-based miner controlled by billionaire Anil Agarwal, and unit Sesa Goa Ltd. completed buying a 59% stake in Cairn India from Cairn Energy Plc and other shareholders in December for $8.67 billion. Bloomberg

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