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ONGC Q2 Results: Profit tumbles 30% YoY to Rs 12,826 crore on windfall tax woes

India’s high oil and gasoline producer reported a 30 per cent fall in September quarter internet revenue after the federal government introduced a brand new tax on windfall income arising from a spurt in worldwide vitality costs.

Web revenue of Rs 12,825.99 crore, or Rs 10.20 a share, in July-September 2022-23 is in contrast with Rs 18,347.73 crore, or Rs 14.58 per share internet revenue in the identical interval a 12 months in the past,

(ONGC) mentioned in a press release.

Revenue fell 15.6 per cent over the previous June quarter when it had reported Rs 15,205.85 crore internet revenue.

Web revenue fell regardless of the corporate’s gross billing for crude oil it produced hovering 37.7 per cent to USD 95.49 per barrel in July-September from USD 69.36 a barrel a 12 months again.

State-owned ONGC sells crude oil, which is refined at refineries to supply petrol, diesel and different petroleum merchandise, at worldwide benchmark charges which soared following the Russian invasion of Ukraine.

Nonetheless, the federal government starting July 1 introduced a brand new tax to remove good points accruing from the worldwide vitality value surge.

The tax, which is adjusted each 15 days in line with modifications in world oil costs, was as excessive as USD 40 per barrel when the tax was launched.

At an investor name, ONGC Director (Finance) Pomila Jaspal mentioned the agency paid Rs 6,400 crore as particular extra excise responsibility (SAED) within the quarter.

However for this levy, ONGC income would have topped report earnings of July-September 2021.

ONGC had in July-September 2021 posted the very best ever quarterly internet revenue by any Indian company after it opted for decrease revenue tax in lieu of giving up exemptions.

Because of this, its company revenue tax price got here to 22 per cent plus relevant surcharge and cess as in opposition to the sooner price of 30 per cent plus relevant surcharge and cess.

Jaspal mentioned the mechanism to levy windfall revenue tax ensures that the corporate will get USD 75-76 per barrel realisation.

Any price above that’s taken away as tax.

Windfall revenue tax is a manufacturing levy and is paid to the federal government on each barrel of oil produced. SAED is the responsibility first on crude oil produced and different pre-existing levies reminiscent of royalty and oil cess are paid thereafter.

ONGC mentioned it received the next USD 6.10 per million British thermal unit value for natural gas it produced in July-September as in comparison with USD 1.79 a 12 months again.

Income from operation was up 57.4 per cent to Rs 38,321 crore.

The ONGC board authorised an interim dividend of 135 per cent, or Rs 6.75 on every equity share of Rs 5. The overall payout can be Rs 8,492 crore, nearly all of it going to the federal government. The federal government owns nearly 59 per cent shares of ONGC.

ONGC’s oil and gasoline manufacturing dropped 2 per cent within the second quarter of present fiscal year. Oil manufacturing of 5.36 million tonne in July-September is in contrast with 5.47 million tonne output a 12 months again. Equally, gasoline manufacturing of 5.35 billion cubic meters in Q2 is in contrast with 5.46 bcm output in July-September 2021.

The agency mentioned it made six discoveries throughout the present fiscal 12 months within the KG basin acreage it holds. “Out of six discoveries notified until date throughout FY 2022-23, two discoveries viz. Mandapeta-60 and Kesanapalli West Deep-7 have already been monetized by ONGC,” the assertion mentioned.

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