Cairn India
YoY, the consolidated performance of Cairn looks good due to three factors – firstly, more than net revenue, which at Rs.5049 crore was up 16%, it was other income which boosted the bottomline – it was up 83%. Secondly, there is a forex gain of Rs.243 crore compared to Rs.3 crore in Q4FY13. Thirdly, in terms of expenses, operating cost as a percentage of revenue dropped to 40% v/s 44% and interest cost dropped 27%. But the almost three times jump in tax outgo at Rs.164 crore v/s Rs.58 crore more than compensated for the lower costs. The company ended the quarter with a net profit at Rs.3035 crore, up 18%. Sequentially though the picture is not all that encouraging, with revenue flat, growing less than 1% and net profit is up 5% primarily due to increase in investment income consequent to realisation of gains on maturity of investible funds and one time charge of ESOP policy change accounted in previous quarter. The cash earnings per share was Rs.17.75. Overall capex incurred was higher at US$ 362 million (gross) and US$ 237 million (net).
For Fy14, the company posted a record revenue of Rs.18762 crore, up 7% due to enhanced volumes and benefit from rupee depreciation. This increase has been partly offset by higher profit sharing with GoI in DA1 consequent to tranche change. EBITDA for the fiscal came in at Rs.13877, up 7% and EBITDA margin remained status quo at 74%. This rise in EBITDA was driven by low operational cost of US$ 3.9/bbl in onshore Rajasthan block . Net profit for the year came in at Rs.12,432 crore, up 3% and NPM actually fell from 69% to 66%. The company generated cash flow from operations of Rs.11,093 crore, which is almost as much as in FY13. . Forex gain for the year was higher at INR 739 crore on account of over 10% rupee depreciation against the dollar. Cash and Cash equivalents as at period end were Rs.13,707 crore in rupee funds and US$ 1,530 million in dollar funds, part of which is expected to be used for share buy-back and dividends.
Looking ahead, the company has planned on a capex of US$ 3 Bn by FY17 and its target is to achieve reserve replacement ratio of 150% in next 3 years subject to PSC extension till 2030 and a 3 year production CAGR of 7-10% from known discoveries with flat production in FY15.
In FY14, the company achieved 6% yoy growth in average daily gross operated production and crude oil production of 76 mmbbls (11 MMT) for the year. It achieved the targeted production rate of 200,000 boepd in the prolific Rajasthan block in March 2014, a sequential growth of 2% at 190,881 boepd in the quarter. India currently imports 3.5 million bopd of crude oil. The current domestic crude oil production of India is approximately 0.77 million bopd of which Cairn India operated assets (Ravva, CB/OS-2 and the RJ-ON-90/1) contributes about 30%.