The Hindu : Business : ONGC profit dips to Rs. 8,664 cr.

Online edition of India's National Newspaper
Wednesday, Jun 23, 2004

Business

Business

ONGC profit dips to Rs. 8,664 cr.

By Sushma Ramachandran

NEW DELHI, JUNE 22. The Oil and Natural Gas Corporation (ONGC), the largest oil exploration and production company, has reported a dip in profitability after having helped oil marketing companies to bear the subsidy burden of kerosene and LPG. The profit has dropped to Rs. 8,664 crores during 2003-04 from Rs. 10,529 crores in the previous year.

Addressing a press conference here today Subir Raha, Chairman and Managing Director, said the fall of 17.7 per cent in profit was attributed largely to payment of Rs. 2,690 crores to the oil marketing companies — Indian Oil Corporation, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited — to compensate them for the subsidy burden on sale of kerosene and LPG. In addition, rupee appreciation had hit the amount the company receives on sale of crude oil by as much as Rs. 1,100 crores.

Mr. Raha, said the company's total revenues had also fallen by 6.8 per cent to Rs. 32,180 crores in 2003-04 from Rs. 34,536 crores in 2002-03. The company's net worth, however, has risen to Rs. 40,931 crores from Rs. 35,608 crores, a rise of 18.9 per cent. The company's market capitalisation has now reached Rs. 125,000 crores, making it the highest of any corporate in the country.

The subsidy payout made by the ONGC was meant to help the oil marketing companies that were facing erosion in their profits as a result of soaring world crude oil prices and the previous government's decision not to increase subsidy in the budget.

Mr. Raha conceded that the company gained from the rise in crude prices in the international market in the last fiscal, but noted that much of this advantage was whittled down because of the hardening rupee and the subsidy payout. As against $28.5 for crude in 2002-03, the company was paid $29.95 a barrel in the last fiscal. But rupee appreciation brought this down by about $1.4 a barrel, a loss of Rs. 1,100 crores during the year in rupee terms. ONGC officials said the subsidy payment then further reduced the average price per barrel to nearly $27.5. As a result, the revenues from sale of crude oil were estimated at Rs. 22,563 crores, lower by Rs. 2,228 crores compared to the previous year. In contrast, revenues from gas sales rose to Rs. 5,335 crores from Rs. 5,076 crores.

The company declared a dividend of 240 per cent for 2003-04, amounting to Rs. 3,422.20 crores, out of which an interim dividend at the rate of 140 per cent amounting to Rs. 1,996.31 crores was paid to the Government in February.

On crude oil output, he said it was maintained at 26 million tonnes during 2003-04 despite disruption of Mumbai High-Uran trunk pipeline in August last year. Natural gas production was maintained at 23.5 billion cubic metres and gas sales amounted to 19 billion cubic metres.

Mr. Raha said the ONGC, which had doubled the group turnover in three years to cross $10 billion, had set its sights on a group turnover of $50 billion in the future.

Printer friendly page
Send this article to Friends by E-Mail

Business