ONGC Q3 net up 11 per cent
India's most valuable company, Oil and Natural Gas Corp Ltd (ONGC), said on Monday its quarterly net profit rose 11 per cent, ahead of forecasts, as high oil prices outweighed the subsidies paid to refiners.
The state-run oil and gas producer said net profit rose to Rs 38.88 billion($881 million) in the quarter to December, up from Rs 34.93 billion in the same period a year ago.
The subsidy burden for the quarter stood at 28.43 billion, an ONGC spokesman said.
Nine analysts polled by Reuters had forecast a 10 per cent increase in net profit to Rs 38.27 billion. ONGC shares closed 2.5 per cent down at Rs 1,236.1 in a slightly weak Mumbai market.
As a flagship state-run group, ONGC follows federal government's orders to sell its crude at a discount to state-owned refiners, helping to insulate India's economy by capping retail fuel prices.
A spokesman said ONGC had given a discount of approximately $16.5 a barrel on crude oil to state-run refiners Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd to help them reduce their losses.
"The results are in line with our expectations ... ONGC may have gained from the recent hike in price of natural gas," an analyst with an international brokerage said.
ONGC's performance in the December quarter may still be affected by a fire at its oldest field, Mumbai High, in July, which lost the company one million tonnes of production -- 7.4 million barrels -- as of early December. Normal output of 275,000 barrels per day should be reached by March.
For the fiscal year to March, ONGC crude output is estimated at 509,000 barrels per day (bpd) and is expected to rise by 10 percent in 2006/07.
ONGC, which recently entered into a broad understanding with Royal Dutch Shell Plc to help boost its oil production, has raised its capital expenditure to Rs 140 billion for 2006/07 from 120 billion this year.
During the quarter, ONGC shares rose 11 per cent against an 8 per cent rise in the BSE Oil & Gas index, which was boosted by private-sector refiner Reliance Industries Ltd.
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