Oil producer Cairn India’s poor run continued in the recent March quarter. The company posted a consolidated loss of ₹241 crore as against profit of ₹3,035 crore in the March 2014 quarter. An impairment loss of ₹505 crore on the company’s Sri Lanka asset dragged the company into loss. But even excluding this, the profit was more than 90 per cent lower than in the year-ago period. Revenue dipped 47 per cent.
Blame this primarily on the rout of crude oil. Cairn India’s price realisation at about $48 a barrel oil equivalent in the March quarter was nearly half over the period last year.
It did not help that the company’s production fell 7 per cent compared with the year-ago period. Rise in exploration costs and higher exploration cost write-offs were also a drag.
The company is going through a rough patch. Consolidated revenue in 2014-15 is down about 22 per cent while profit has fallen two-third. With oil prices languishing, the company has slashed capital expenditure — this will impact output growth. To add to the troubles, the taxman recently asked the company to cough up ₹20,495 crore for alleged failure to deduct tax on gains made by erstwhile parent Cairn Energy Plc. The stock has lost 35 per cent over the last year.