Moneycontrol Bureau
Oil explorer Cairn India met street expectations on the topline front but missed estimates on bottomline and operational front in July-September quarter. Consolidated profit rose 108.4 percent sequentially (down 32 percent year-on-year) to Rs 2,278 crore in the quarter gone by.
In Q1FY15, there was an exceptional item of Rs 1,627 crore pertaining to a change in depreciation policy, denting the bottom line of the company.
Consolidated net sales declined 11.2 percent (down 14 percent on yearly basis) to Rs 3,982 crore in the quarter ended September 2014 compared to Rs 4,482.9 crore in previous quarter on account of lower volumes due to planned maintenance shutdown, realisations impacted by the softer global crude prices and higher profit petroleum tranche in Rajasthan.
During the quarter, total profit petroleum was Rs 1,322 crore including Rs 1,133 crore for Rajasthan block, said the company in its filing, adding royalty for the RJ block was Rs 908 crore.
According to the average of estimates of analysts polled by CNBC-TV18, profit was expected at Rs 2,300 crore on revenue of Rs 3,960 crore for the quarter.
Operating profit dropped 13 percent sequentially to Rs 2,656 crore and margin declined 140 basis points to 66.7 percent. "Operational performance was impacted by increased facility and well maintenance costs related to the shutdown at Rajasthan, and exploration costs. This was in addition to lower volumes and softer realisations," the company reasoned.
Analysts had expected operating profit at Rs 2,800 crore and margin at 71 percent for the quarter.
Depreciation and depletion charge for the quarter was higher at Rs 703 crore, compared to Rs 547 crore in Q2 fiscal 2014, as a result of change in method of depreciation adopted in the previous quarter and an increase in asset capitalisation, said the company, adding operating costs at Rajasthan continued to remain in single digits at USD 6.3 per barrel.
Gross average daily operated production during the quarter stood at 194,508 barrels of oil equivalent per day (boepd).
The company said the three-year Rajasthan exploration campaign (2013-16) seeing continued success, doubling exploration and appraisal activity, adding there were three new discoveries in the quarter, taking the total number of discoveries to 36.
It is planning to drill horizontal wells in the current exploration and appraisal campaign in order to accelerate early production.
"Two new satellite fields - NI and Guda - brought into production. In Barmer Hill, the company is targeting monetization of around 2 billion barrels of hydrocarbons in place in the north of the basin," said Cairn.
The oil explorer ended the quarter with strong cash and cash equivalents position of Rs 16,029 crore.
Meanwhile, Cairn India today appointed Mayank Ashar as the managing director & chief executive officer of the company with effect from November 17, 2014.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
