Oil India Limited (OIL) has reported its first-quarter financial results, showing a marginal rise in profit despite a dip in revenue due to falling crude prices. Here's a breakdown of the key details from Oil India's Q1 report:
- Profit Rise: Oil India's profit for the quarter ended June 30 rose by 4%, reaching ₹1,613.34 crore ($194.8 million) compared to the same period a year earlier.
- Expense Reduction: The Company’s total expenses witnessed a significant fall of 26.5%, which outweighed the 22% slump in revenue. This expense reduction played a key role in boosting the overall profit.
- Crude Price Impact: A 43% drop in crude oil prices during the June quarter, compared to the peak prices of the previous year, contributed to the revenue decline.
- Sequential Comparison: Oil India's profit declined by nearly 10% from the previous quarter, primarily due to the government's decision to slash gas prices in April. The government's action aimed to support industrial buyers and city gas distributors.
- Gas Segment Performance: Profit before tax and interest from the company's natural gas segment showed a substantial increase of nearly 88% year-on-year but fell about 25% sequentially.
- Crude Oil Production: The company's growth was supported by a 5.3% increase in crude oil production to 0.820 million tonnes in Q1 of FY24, compared to 0.729 million tonnes produced in the same period of the previous fiscal year. This increase in production, coupled with lower operating costs, contributed to the positive results.
- Price Realization: Oil India achieved $76.85 for every barrel of crude oil produced during the quarter, as compared to $112.73 per barrel in the previous year.
- EBITDA Margin: The earnings before interest, taxes, depreciation, and amortization (EBITDA) margin for the period ended June 30, 2023, increased to 53.49%, a rise of 19.51% from the previous comparative period.
- Turnover Decrease: Due to the drop in prices, the company's turnover declined to ₹4,644.73 crore in Q1, compared to ₹5,964 crore a year ago.
Despite the challenges posed by falling crude prices, Oil India managed to achieve a marginal rise in profit through a combination of expense reduction, increased crude oil production, and improved EBITDA margin. The company's efforts to maintain its operational efficiency have played a crucial role in its financial performance during the quarter.