State-owned Oil and Natural Gas Corp (ONGC) on Tuesday reported its first-ever quarterly loss after it took an impairment on the slump in oil and gas prices.
India’s top oil and gas producer reported a ₹3,098 crore loss in the January-March quarter as compared to a profit of ₹4,240 crore in the same period a year back.
Company Chairman and Managing Director Shashi Shanker said ONGC booked an impairment loss of ₹4,899 crore in the fourth quarter of 2019-20, reflecting valuation of the firm’s assets after fall in crude oil prices.
But if not for the impairment, the company would have booked a profit.
An impairment loss is a recognised reduction in the carrying amount of an asset that is triggered by a decline in its fair value.
The same reason also led to the company seeing FY20 net profit halved to ₹13,445 crore from ₹26,765 crore a year back.
Revenue in the fourth quarter fell to ₹21,456 crore from ₹26,759 crore a year earlier.
Crude oil production was marginally lower at 5.82 million tonnes in January-March as compared to 5.9 million tonnes in the previous fiscal.
Natural gas output fell to 6.04 billion cubic meters from 6.56 bcm in January-March 2019 after demand fell due to the COVID-19 induced lockdown.
Shanker said the company’s overseas arm ONGC Videsh Ltd too saw its net profit for FY20 fall to ₹454 crore from ₹1,682 crore after it also took an impairment loss of around ₹3,000 crore.