22nd Jan 2015 12:08
LONDON (Alliance News) - Vedanta Resources PLC Thursday said its subsidiary Cairn India Ltd has reported a significant drop in revenue, earnings before interest, tax, depreciation and amortisation, and post tax profit in its third quarter and for the first three quarters of the financial year, mainly due to the falling oil price.
Vedanta holds a 59.88% interest in Cairn India and is its largest shareholder.
During the third quarter ended December 31, the subsidiary reported revenue of USD565 million, down 14% quarter-on-quarter and 30% year-on-year. This hit Cairn India's Ebitda, which fell to USD341 million, from USD446 million in the previous quarter and USD573 million a year earlier.
For the nine months ended December 31, Cairn India's revenue fell to USD1.97 billion, from USD2.28 billion in the first three quarters a year earlier. Its Ebitda fell 23% to USD1.30 billion, from USD1.70 billion.
Cairn India's profit after tax for the the third quarter totalled USD218 million, a 42% decline from the USD376 million reported in the second quarter, and 53% lower than the third quarter a year earlier, when it made USD465 million post tax profit.
For the first nine months ended December 31, the subsidiary has made a USD777 million post tax profit, which is a 50% reduction from the USD1.56 billion reported in the same period a year earlier.
At the end of December, Cairn India reported a cash balance of USD2.80 billion, giving the company "resilience," it said.
"We continue to drive operational efficiencies in the current crude price environment. Our cash rich balance sheet and best-in-class cost profile provide a solid foundation to operate the high margin core fields," said Mayank Ashar, managing director of Cairn India.
During the third quarter, Cairn India received an average of USD68.1 per barrel of oil equivalent, a 25% reduction from the second quarter and a 28% reduction from a year earlier. For the nine months, it averaged USD85.2 per barrel of oil equivalent, a 10% decline from a year earlier when it achieved USD94.5 per barrel.
During the third quarter, the subsidiary invested USD247 million, resulting in total capital expenditure for the first three quarters of USD785 million.
Cairn India is set to hit its production target for the 2015 financial year, with gross production totalling 20 million barrels of oil during the third quarter. This has been driven by a 10% increase in production from the Rajasthan field to 180,000 barrels of oil equivalent per day alongside offshore assets increasing production by 24% in the quarter.
Cairn India added that its operating costs at the Rajasthan field remain remarkably low at USD5.7 per barrel.
Vedanta shares were up 10.7% to 484.10 pence per share on Thursday afternoon
By Joshua Warner; [email protected]; @JoshAlliance
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