Cairn India

The company posted a set of disappointing numbers for Q3FY14 but the gratifying part was that it is still well on its way to meet the production targets set for FY14. It reported a 15% (QoQ) drop in net profit at Rs.2884 crore though revenue rose 7.5% at Rs.5000 crore, a new record for the quarter. The fall in earnings on account of three factors – firstly, it had a forex loss of Rs.129 crore v/s Rs.429 crore gain in Q2. Secondly, employee benefit expenses jumped up almost 7 times to Rs.185 crore and thirdly, it had to write-off exploration cost to the tune of Rs.100 crore, which has doubled from Rs.51 crore it had written off in Q2. Its tax outgo was also up 46% though the bottomline was salvaged to some extent on account of the other income Rs.140 crore, up 26%. EBITDA margin slipped to 71.8%, down 310 bps on QoQ.

The company during the quarter achieved highest ever average gross operated production of 224,493 boepd in the quarter, up 5% (QoQ). It delivered 6% sequential increase in average gross production in Rajasthan. It achieved over 50% success rate and it ppened up 3 new play types and added oil in place resources of 500-600 MMbbls in low permeability reservoir. The company is on track to drill 50% of gross risked prospective resources by fiscal year end. The company has stated that it is well on track to meet the FY14 exit guidance of over 225,000 boepd. 

Cash and Cash equivalents as at 31st Dec’13 at Rs.13,000 crore in rupee funds and US$ 1.45 billion in dollar funds, part of which is expected to be used for the buyback programme. The buyback is at a price of Rs.335/share and it will spend Rs.5725 crore for the buyback. The company wide gross capex incurred was US$ 535 million in the first 9MFY 14. The gross capex during the quarter was US$ 250 million up 80% QoQ, with 45% spent on exploration activity and balance on the production and development programs, across the assets. The gross cumulative Rajasthan development capital expenditure as on 31 December, 2013 was US$ 4.1 billion.