Oil and gas exploration company Cairn India surpassed analysts’ expectations on quarterly earnings front Friday. Consolidated profit increased more than two-fold to Rs 778.7 crore, the highest in last six quarters, compared with Rs 359.55 crore in previous quarter, driven by strong operational performance and forex gain.
Consolidated revenue during the quarter increased 8.1 percent to Rs 2,038.6 crore on sequential basis as discount to Brent for Rajasthan crude slipped substantially from USD 8.2 a barrel to USD 4.3 a barrel, the company said.
Realisation was up by 10 percent QoQ to USD 41.8/boe as Rajasthan crude realisation increased by 11 percent to USD 41.6 a barrel. Brent price was relatively flat on average basis at USD 45.8 a barrel in Q2.
According to average of estimates of analysts polled by CNBC-TV18, profit was estimated at Rs 421 crore on revenue of Rs 2,001 crore for July-September quarter.
EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 31 percent quarter-on-quarter to Rs 1,039.1 crore, the highest in last five quarters. Margin expanded by 760 basis points to 51 percent in Q2 due to higher revenue and reduction in operating cost.
Reduction in facility and well maintenance expenses through streamlining the maintenance activities and work-over programs helped lower the operating cost, the company said.
Operational performance was far ahead of estimates as analysts estimated EBITDA at Rs 861 crore and margin at 43 percent for the quarter.
Cairn India reported foreign exchange gain at Rs 64.39 crore in July-September quarter against loss of Rs 124.79 crore in June quarter.
It had a gross production of 18.1 mmboe (millions barrels of oil equivalent) across all the assets, of which working interest production was 11.6 mmboe while gross sales was 17.6 mmboe averaging at 191,579 boepd (barrel of oil equivalent per day).
The company said gross production from Rajasthan block was marginally up by 0.5 percent QoQ to an average rate of 167,699 boepd, aided by continued strong volumes from Mangala EOR and inline performance from Bhagyam and Aishwariya. Total production for the quarter was 15.4 mmboe.
During the quarter, it has strong free cash flow of Rs 1,565 crore even at low oil price and solid cash & cash equivalents position of Rs 24,339 crore.