In spite of lower sales due to decline in production, flagship explorer ONGC posted a near 6% increase in its Q2 net profit at INR 5,089 crore on the back of lower subsidy payout and an appreciating rupee.
The rise in net comes for the first time in the last five quarters. Net profit had stood at INR 4,808 crore in the same period a year ago. For the H1 ended September 30th net profit fell to INR 9,937 crore from INR 11,444 crore a year ago.
Mr R S Sharma chairman of ONGC said that "Our net realization after paying for subsidy was USD 56.42 per barrel as compared to USD 46.72 last year.”
ONGC gave USD 14 per barrel discount to refiners as subsidy to compensate them for their losses on fuel sales. The subsidy payout at INR 2,630 crore was 79% lower than INR 12,663 crore outgo in the previous corresponding period. ONGC reckons its profit would have been higher by INR 1,491 crore if it did not have to pay the subsidy.
The appreciating rupee helped the company in improving realization in rupee terms from crude sales, which was INR 2,731 per barrel in the quarter under review against INR 2,041 a barrel a year ago.
