An employee pours a sample of oil into a test tube in the control laboratory at a blending plant in Torzhok, Russia. (Photographer: Andrey Rudakov/Bloomberg)

ONGC Q3 Profit Falls On Higher Depreciation Costs

Oil and Natural Gas Corporation Ltd.’s profit declined in the quarter ended December on higher depreciation costs.

Net profit of the country’s largest oil explorer fell 2.3 percent sequentially to Rs 5,014.7 crore in the third quarter, it said in an exchange filing today. That’s much lower than Rs 6,130 crore estimated by analysts tracked by Bloomberg.

  • Net realisations of the company grew 17 percent over the year-ago period, as it earned an average $60.58 per barrel in the third quarter.
  • Total oil output fell 1.3 percent year-on-year to 5.20 million metric tonne.
  • Gas production increased 4.2 percent to 6.28 billion cubic meters.

Revenue increased 21.3 percent from the previous quarter to Rs 22,996 crore, missing the Rs 23,468 crore forecast. The company’s expense on account of depreciation, depletion, amortisation and impairment jumped to Rs 4,255.8 crore from Rs 3,505.7 crore in the last quarter.

Earnings before interest, tax, depreciation and amortisation rose 19.5 percent to Rs 10,919 crore crore, while margin narrowed to 47.5 percent on a sequential basis.

Last month, ONGC had announced that it will acquire the government’s 51.1 percent stake in refiner and marketer Hindustan Petroleum Corporation Ltd. for Rs 36,915 crore, helping the government exceed its record divestment target for the current financial year. The state-run explorer is planning to sell its holding in Indian Oil Corp. and GAIL India Ltd. to accumulate funds for paring debt raised for the HPCL acquisition, Bloomberg reported.

Shares of the company fell as much as 0.72 percent to Rs 187.3 apiece prior to the earnings announcement. ONGC gained 14.2 percent in the third quarter.