ONGC net up, misses estimate on higher subsidy discounts

Oil & Natural Gas Corporation (ONGC), the country’s state-owned petroleum explorer and producer, reported a 19 per cent jump in net profit for the quarter ended June. However, it missed analyst estimates of earnings, due to higher discounts for oil marketing companies (OMCs).

The company recorded a net profit of Rs 4,782 crore during the three-month period, as against Rs 4,016 crore in the corresponding quarter last year (2013-14). This was lower than the Rs 5,850 crore median estimate of 29 analysts surveyed by Bloomberg.

ONGC partly compensates OMCs for retail sales of fuels below cost. The OMCs suffered gross underrecoveries of Rs 28,690 crore in the quarter. Of this, Rs 13,200 crore was shared by ONGC in the form of discounts, as compared to Rs 12,600 crore of the latter in the corresponding quarter last year. This impacted the profit after tax by Rs 7,396 crore, as compared to a Rs 7,131 crore impact in the same quarter last year, it said. Total income rose 11 per cent to Rs 22,746 crore as compared to Rs 20,505 crore in the same period last year.

Crude oil production remained flat at six million tonnes during the quarter.

Natural gas production dipped 2.3 per cent to six billion cubic metres. The share price at the BSE exchange closed on Wednesday at Rs 401.8, down 0.9 per cent as compared to the previous close.