State-owned oil and gas major ONGC reported on February 11 a consolidated profit after tax (PAT) of Rs 11,637 crore for the third quarter ended December 2021, up 220 percent from the profit of Rs 3,637 crore reported in the corresponding quarter a year ago.
On a sequential basis, the profit was 38 percent lower from a PAT of Rs 18,749 crore in the previous quarter. ONGC had received a deferred and current tax credit of Rs 9,320 crore in the preceding quarter of current fiscal. Adjusting for the tax credit, the profit for the reported quarter has increased by 23 percent on a sequential basis.
Consolidated revenue for the quarter stood at Rs 1.46 lakh crore, up by 45 percent compared to Rs 1.00 lakh crore reported a year-ago. Consolidated revenues in the preceding quarter stood at Rs 1.22 lakh crore.
Segmental Performance
The company’s exploration and production (E&P) business generated revenues of Rs 28,408 crore for the quarter at a YoY growth of 67.3 percent and a sequential growth of 17 percent.
The break up between offshore and onshore revenues was 65 and 35 percent.
EBIT (earnings before interest and tax) for the E&P business improved by 275 percent on year and by 26.5 percent QoQ to Rs 11,379 crore.
Refining and marketing (R&M) revenues grew by 40.4 percent on year to Rs 1.29 lakh crore from 0.92 lakh crore reported during the same period a year ago. Compared to the preceding quarter the growth in R&M revenues stood at 22 percent.
EBIT for this business declined marginally by 1.2 percent on year but increased sequentially by 29 percent to Rs 2,540 crore.
Revenues from outside India businesses grew by ~50 percent to Rs 4,520 crore as against Rs 3,018 crore reported in the same period a year ago. Sequentially, there is a growth of 3 percent from Rs 4,386 crore.
EBIT for the overseas business grew by 118 percent year on year and by 7.5 percent on quarter to Rs 1,680 crore.
Operational Performance and Margins
Higher crude and gas prices resulted in an increase in the raw material costs for the company during the quarter.
The raw material costs as percentage of operating revenue grew by 540 bps on year and by 400 bps on quarter to 21.8 percent.
Employee costs as percentage of operating revenue however, declined marginally by 60 bps on year and by 30 bps QoQ to 1.1 percent.
The company saved on the statutory levies it paid during the quarter. The statutory levies as percentage of operating revenue declined by 670 bps on year to 13 percent. They were flat on a sequential basis.
The write off of exploration costs during the quarter declined by 120 bps on year to 0.8 percent of operating revenues. There was no change on the sequential basis.
EBITDA (earnings before interest, tax, depreciation and amortization) jumped by 90 percent on year to Rs 21,420 crore compared to Rs 11,279 recorded during the same period a year ago. On a sequential basis, the increase in EBITDA is 20.6 percent from Rs 17,755 crore.
Consequently the EBITA margins for the quarter improved by 350 bps on year and 20 bps on quarter to 14.7 percent. The net margin for the quarter stood at 8 percent compared to 3.6 percent in the same period of last year.
Dividend Payout
The company has declared 2nd interim dividend of Rs 1.75 per equity share of face value of Rs 5 each i.e. 35%, for the Financial year 2021-2022.
February 22 is the record date for determining eligibility of shareholders for payment of the interim dividend. The dividend will be paid to the eligible shareholders on or before March 12.
ONGC closed at Rs 168.15, down Rs 0.95 from its previous close at the National Stock Exchange on February 11. The stock has generated returns of 69 percent during the past one year and is trading up by 4 percent in the past one month.
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