Despite Highest Ever Subsidy Burden, ONGC Net Up By 44%

ONGC has earned gross revenue of Rs 21403 crore during Q4FY14 as against Rs 21901 crore earned during the same time last year, a marginal drop of 2.3% while its net profit spurted from Rs 3387 crore to Rs 4889 crore during the said period, showing a jump of 44.3%. On annual basis, the company’s topline jumped by 1.1% to Rs 84201 crore as against Rs 83290 crore earned during FY13. On the other hand, the company’s PAT rose by 5.6% to Rs 22095 crore during FY14. 

Despite increase in profit, the biggest setback to the company was in terms of realization from crude oil owing to under recovery discount. The realisation during Q4 has come down to its lowest ever figure of $32.78/bbl as against $40.97/bbl earned during Q4FY13, while it slightly inched upwards on annual basis to $50.85/bbl as against $47.85/bbl earned during FY13. “This was certainly the lowest ever realization since 2004-05 and we are constantly requesting government to increase our price so that it will help us to meet our cost of production," said D K Sarraf, CMD, ONGC. The company was able to earn profit mainly on account of exchange rate fluctuation as it earned profit due to depreciation in rupee. During Q4, the exchange rate remained at Rs 60.79 per dollar as against Rs 54.17 per dollar during Q4FY13. 

The physical performance of the company remained subdued as its crude oil production from its ageing fields dropped to 25.99 MMT during FY14 as against 26.13 MMT produced during FY13. Natural gas production also declined marginally from 25.34 MMT to 24.85 MMT during FY14. The company management is quite hopeful that subsidy burden during this year will be much lower due to deregulation and it has planned Rs 36000 crore capex plan for the current fiscal. The board has recommended a final dividend of 5% in addition to the 185% interim dividend already paid.