Cairn India net dips 51%, shares fall
Cairn India net profit fell 51% year-on-year to Rs 763 crore for the quarter ended September against Rs 1,585 crore last year, hit by a one-time provision for crude output royalty payments on Rajasthan oilfields.business Updated: Oct 21, 2011 22:23 IST
Cairn India net profit fell 51% year-on-year to Rs 763 crore for the quarter ended September against Rs 1,585 crore last year, hit by a one-time provision for crude output royalty payments on Rajasthan oilfields.
"We are now poised to optimise development," said Rahul Dhir, chief executive officer, Cairn India.
Following the weak results, the company's shares fell by 3.7% to a low of Rs 283 in morning trade on the Bombay Stock Exchange on Friday, before settling at Rs 289, down 1.6%.
The company which had tough time since its parent Cairn Energy Plc announced sale of majority stake to London-listed mining group Vendata Resources, made a one-time adjustment of $294 million towards royalty on crude oil produced from Rajasthan block since its inception in end August, 2009.
The cumulative royalty estimate up to second quarter of the current fiscal was $545 million. The royalty is estimated at approximately 15% of the revenue.
Cairn, which does not pay royalty on its 70% share of Rajasthan crude, had agree to make the payments, made on its behalf by ONGC, cost recoverable to get the government approval for the $ 8.7 billion deal.
Cost recovery of royalty - deducting royalty payments - was one of the main pre-condition that the government had set for approving Cairn Energy selling 40% stake to Vedanta.
First Published: Oct 21, 2011 22:22 IST