New Delhi: State-owned oil and natural gas corporation ,ONGC) on Friday reported the highest ever quarterly net profit by any Indian firm of over Rs 18,347 crore, as it made a one-time tax benefit on opting for the lower rate regime.
According to the company’s filings to the stock exchanges, the net profit in the July-September period stood at Rs 18,347.73 crore, as against Rs 2,757.77 crore in the same period a year ago.
The profit in the quarter is compared to net profit of Rs 11,246.44 crore, which ONGC earned in the entire 2020-21 financial year (April 2020 to March 2021).
This is the highest ever quarterly net profit of any company in the country.
before this, Indian Oil Corporation (IOC) achieved the distinction of making the highest ever quarterly profit, registering a net income of Rs 14,512.81 crore in January-March 2013.
IOC’s net profit in the fourth quarter of the financial year 2012-13 was unusually high on account of receipt of fuel subsidy for the full year in one quarter. Its annual profit in that financial year stood at Rs 5,005.17 crore as it had made a loss in the previous quarter for failing to get fuel subsidy assistance.
ONGC posted a net profit of Rs 22,682.48 crore in the first half (April-September) of the current financial year as against Rs 3,254.35 crore a year ago.
Profit in the second quarter (July-September) was supported by higher oil prices and one-time tax benefit of Rs 8,541 crore.
ONGC said the company has an option to pay corporate income tax at the rate of 22 per cent, which is the applicable surcharge and cess (lower rate), as against the earlier rate of 30 per cent and applicable surcharge and cess subject to certain conditions.
“Keeping in view all the provisions under the said section 115BAA of the Income Tax Act, 1961, during the quarter the Company has decided to avail the option of lower rate from the financial year 2020-21.
“Accordingly, the company has recognized a provision for tax expense in the financial results for the quarter and half year ended September 30, 2021, and re-measured its net deferred tax liabilities based on the provision set out in the said section,” it said. .
The net effect on account of availing the option has resulted in reduction of deferred tax by Rs 8,541 crore and reduction in current tax by Rs 1,304 crore (including those relating to earlier years).
It added that a jump in oil prices also helped propel gains.
ONGC received $69.36 for every barrel of crude produced from fields under its operations, as against $41.38 per barrel in July-September 2020.
Revenue grew 44 per cent to Rs 24,353 crore.
Higher price compensates for less production.
ONGC produced about 4 per cent less crude at 5.471 million tonnes, while gas production fell 7 per cent to 5.467 billion cubic metres.
“There has been a decline in crude oil and gas production during the current year, mainly due to restrictive conditions created by Cyclone Taukata and the impact of COVID,” the firm later said in a press statement.
Also, delay in mobilization of Mobile Processing Unit for WO-16 Cluster project in West Offshore also affected production from this area. The board approved an interim dividend of 110 per cent (Rs 5.50 per equity share of Rs 5 each). The total payment on this account will be Rs 6,919 crore.
According to the company’s filings to the stock exchanges, the net profit in the July-September period stood at Rs 18,347.73 crore, as against Rs 2,757.77 crore in the same period a year ago.
The profit in the quarter is compared to net profit of Rs 11,246.44 crore, which ONGC earned in the entire 2020-21 financial year (April 2020 to March 2021).
This is the highest ever quarterly net profit of any company in the country.
before this, Indian Oil Corporation (IOC) achieved the distinction of making the highest ever quarterly profit, registering a net income of Rs 14,512.81 crore in January-March 2013.
IOC’s net profit in the fourth quarter of the financial year 2012-13 was unusually high on account of receipt of fuel subsidy for the full year in one quarter. Its annual profit in that financial year stood at Rs 5,005.17 crore as it had made a loss in the previous quarter for failing to get fuel subsidy assistance.
ONGC posted a net profit of Rs 22,682.48 crore in the first half (April-September) of the current financial year as against Rs 3,254.35 crore a year ago.
Profit in the second quarter (July-September) was supported by higher oil prices and one-time tax benefit of Rs 8,541 crore.
ONGC said the company has an option to pay corporate income tax at the rate of 22 per cent, which is the applicable surcharge and cess (lower rate), as against the earlier rate of 30 per cent and applicable surcharge and cess subject to certain conditions.
“Keeping in view all the provisions under the said section 115BAA of the Income Tax Act, 1961, during the quarter the Company has decided to avail the option of lower rate from the financial year 2020-21.
“Accordingly, the company has recognized a provision for tax expense in the financial results for the quarter and half year ended September 30, 2021, and re-measured its net deferred tax liabilities based on the provision set out in the said section,” it said. .
The net effect on account of availing the option has resulted in reduction of deferred tax by Rs 8,541 crore and reduction in current tax by Rs 1,304 crore (including those relating to earlier years).
It added that a jump in oil prices also helped propel gains.
ONGC received $69.36 for every barrel of crude produced from fields under its operations, as against $41.38 per barrel in July-September 2020.
Revenue grew 44 per cent to Rs 24,353 crore.
Higher price compensates for less production.
ONGC produced about 4 per cent less crude at 5.471 million tonnes, while gas production fell 7 per cent to 5.467 billion cubic metres.
“There has been a decline in crude oil and gas production during the current year, mainly due to restrictive conditions created by Cyclone Taukata and the impact of COVID,” the firm later said in a press statement.
Also, delay in mobilization of Mobile Processing Unit for WO-16 Cluster project in West Offshore also affected production from this area. The board approved an interim dividend of 110 per cent (Rs 5.50 per equity share of Rs 5 each). The total payment on this account will be Rs 6,919 crore.
,