Oil India Ltd has reported a 16 per cent drop in net profit for the second quarter of the current fiscal against the same quarter last year.
This was mainly due to the steep increase in subsidy outgo in the form of discounts to public sector oil marketing companies that hit the company’s profitability.
The subsidy burden for the second quarter was up to Rs 2,078.17 crore (Rs 844.44 crore). For the first half of the current fiscal, the subsidy outgo has gone up by 55.94 per cent against the same period last year, the company said in a statement.
Higher subsidy has also resulted in lower net realisation from crude oil sales.
The company’s net price realisation during the quarter stood at Rs 2,899,60/barrel (from Rs 3,949.44/barrel), despite an exchange rate of Rs 55.22 versus the dollar. It said that higher subsidy outgo coupled with the increase in cess to Rs 4,500 a tonne from Rs 2,500 a tonne by the Government had dented its profitability.
The cess hike has resulted in an additional burden of Rs 381 crore as statutory levies.
Further, there was an increase in paid-up share capital from Rs 240.45 crore to Rs 601.12 crore on account of allotment of bonus shares on April 2.
However, the company benefited from the exchange rate movement.
Exchange rate Rs/dollar has increased by 21 per cent from Rs 45.24 to Rs 54.66. This resulted in additional revenue of Rs 921 crore and Rs 98 crore in respect of crude oil and natural gas, respectively.
Oil India has started drilling its first well in Gabon. The well was spudded on October 28.
On the BSE, the company’s share price closed up 0.09 per cent at Rs 475.65 on Tuesday.