Cairn India Ltd. (CAIR), operator of the nation’s biggest onshore oil field, posted an 11 percent decline in profit that missed analyst estimates.
Net income fell to 21.9 billion rupees ($421 million) in the three months ended March 31 from 24.6 billion rupees a year earlier, the company based in Gurgaon near New Delhi, said in a statement today. The median estimate of 32 analysts surveyed by Bloomberg was a profit of 23.7 billion rupees.
The company lost 2.2 billion rupees after currency fluctuations, compared with 380.1 million rupees a year earlier, Cairn India said. The levy on crude oil sales increased to 4 billion rupees from 2.7 billion.
Cairn India shares have climbed 11 percent this year, trailing the 12 percent increase in the benchmark Sensitive Index. (SENSEX) The stock fell 0.9 percent to 347.55 rupees at the close in Mumbai, before the earnings were announced.
Vedanta Resources Plc (VED), a metals and mining company based in London with no experience in oil and gas production, and unit Sesa Goa Ltd. (SESA) completed the acquisition of a 59 percent stake in Cairn India from shareholders, including Cairn Energy Plc (CNE), for $8.67 billion in December, 16 months after announcing the deal in August 2010.
Approval for the takeover from India’s cabinet on June 30 was on condition royalty will be included in the cost of field development, which can be recovered from sales. State-run Oil & Natural Gas Corp., Cairn’s partner with a 30 percent stake in the Rajasthan block, paid the entire royalty since production started in August 2009.
Cairn India sells oil at rates linked to Brent crude oil prices, unlike ONGC, which is required to bear part of the country’s fuel subsidy. Brent crude in London averaged 12 percent higher at $118.45 a barrel in the quarter ended March 31 compared with a year earlier.
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