Financial Daily from THE HINDU group of publications
Monday, Apr 17, 2006
Financial Daily from THE HINDU group of publications Monday, Apr 17, 2006 |
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Corporate Results - Petroleum High global crude prices lift ONGC net 9 pc Our Bureau
Looking ahead Plans to more than quadruple refining capacity to 45.5 mt Market cap crossed Rs 1,90,000 crore on March 30 OVL recorded 26 pc rise in turnover to Rs 7,600 cr
Meeting demands: Mr Subir Raha, Chairman and Managing Director of Oil and Natural Gas Corporation, along with the Director Finance, Mr R. S. Sharma, addressing a press conference in the Capital on Sunday. -- Kamal Narang
New Delhi , April 16 ONGC has registered nine per cent increase in net profit for 2005-06 to Rs 14,175 crore on the back of high global crude prices, even as its refining unit, MRPL witnessed an almost 57 per cent dip in net profit to Rs 380 crore. Announcing the provisional un-audited results, Mr Subir Raha, Chairman, said: "ONGC has posted nine per cent rise in net profit despite paying out the highest ever subsidy of Rs 11,958 crore (Rs 4,104 crore in 2004-05) to oil marketing companies." He added: "The profit rose mainly due to global crude price volatility and higher prices of value-added products, whose production we have increased." The company paid subsidies worth nearly $20 a barrel in the fiscal gone by. It charged $42 to State-run refiners IOC, BPCL, and HPCL, to help them reduce losses.
Record turnover
In 2005-06, ONGC's turnover crossed Rs 50,000 crore for the first time, up nine per cent from Rs 46,712 crore in the previous year. "This turnover excludes Rs 12,000 crore subsidy; in other words the turnover could have actually been Rs 63,000 crore," Mr Raha said. The ONGC group turnover on gross basis was pegged at Rs 86,414 crore, about 21 per cent higher than Rs 71,627 crore recorded in 2004-05. The company's market capitalisation crossed Rs 1,90,000 crore on March 30, 2006. It plans to spend Rs 12,000 crore on exploration and production in the current fiscal to meet increased demand as the nation's economy expands.
MRPL woes
ONGC's subsidiary, MRPL, saw net profit down by more than 50 per cent at Rs 380 crore during the year under review against Rs 880 crore earlier. Mr Raha attributed the fall in profit to the decision by IndianOil, BPCL, and HPCL, to deviate from the agreed refinery gate price formula, forcing discounts on invoiced prices of LPG, MS, SKO, and HSD. Withdrawal of `target plus' benefit scheme on exports during the year also hit profits. MRPL recorded 36.3 per cent rise in turnover at Rs 28,214 crore. Revenue from direct sales rose by 227 per cent to Rs 1,419 crore. Export sales almost doubled to Rs 11,920 crore (Rs 6,185 crore).
Refining capacity
The ONGC Group plans to more than quadruple its refining capacity to 45.5 million tonnes by 2009-2010, from about 12 million tonnes currently, by building new refineries and expanding the capacity of its Mangalore refinery to 15 million tonnes a year from 9.69 million tonnes now at a cost of Rs 8,000 crore. A 7.5-million-tonnes-a-year refinery is proposed in Andhra Pradesh, while another with the same capacity would come up in Rajasthan. In addition, a 15-million-tonnes-a-year refinery is proposed to be established at Mangalore at a cost of Rs 30,000 crore.
Physical performance
On the physical performance front, ONGC fell short of the target of 26.6 million tonnes of crude by eight per cent, with production being limited to 24.4 million tonnes. The lower production was due to the accident at BHN platform in July 2005; the company said that a floating production system was scheduled to be in place within two months to augment production from Mumbai High North to 270,000 barrels a day by August. The production would then be stepped up to 300,000 barrels of oil a day on sustained basis in 2006-07. ONGC's wholly owned subsidiary, ONGC Videsh Ltd (OVL), which has a total of 21 properties in 12 countries, recorded 22 per cent rise in provisional net profit to Rs 930 crore on turnover of Rs 7,600 crore, up 26 per cent. OVL made 10 acquisitions overseas - two each in Vietnam and Cuba and one each in Libya, Egypt, Qatar, Myanmar, Nigeria, and Syria.
Related Stories: More Stories on : Financial Performance | Petroleum | Oil & Natural Gas Corporation Ltd
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