Cairn India reports record quarterly profit
Cairn India, long coveted by British resource giant Vedanta, reported on Wednesday a 10-fold leap in quarterly profit thanks to a surge in crude oil prices and production.
Cairn India, a unit of Scottish energy explorer Cairn Energy, said in a statement net income soared to a record 24.6 billion rupees ($543 million) in the three months to March 31 from the same period a year earlier.
The performance beat analysts' forecasts that the company, based in Gurgaon, near the capital New Delhi, would post a profit of 23 billion rupees.
Revenue in the fiscal fourth-quarter increased nearly six-fold 36.54 billion rupees from 6.93 billion rupees a year earlier. Cairn's average crude price realisation jumped by one-third to $94.20 a barrel from $71 a year earlier.
Cairn India has "created a strong foundation for future growth," said Cairn India chief executive Rahul Dhir in a statement.
The strong earnings figures came as Vedanta Resources awaits approval for its bid to buy a majority stake in Cairn India from the Indian government.
Vedanta and Edinburgh-based Cairn Energy announced last week they had extended a May 20 deadline on the proposed deal in order to secure the Indian government's approval to complete the transaction.
In August 2010 London-listed Vedanta, owned by billionaire Anil Agarwal, said it would purchase a majority stake in Cairn India for $9.6 billion, adding to its assets that already include aluminium, copper, iron ore and zinc mines.
But the deal ran into problems because India wanted to set conditions before allowing Vedanta to assume control over Cairn India, whose biggest holding is the Mangala deposit in Rajasthan -- the country's largest onshore oil field.
Cairn and its Indian state-owned partner Oil and Natural Gas Corp (ONGC) are at odds over the payment of royalties from the Rajasthan oil production.
ONGC owns a 30 percent stake in the Rajasthan block but it pays royalties on 100 percent of the output under a "royalty holiday" scheme dating from the 1990s aimed at promoting private oil exploration in energy-hungry India.
ONGC has been pushing for a more equitable sharing of the royalty burden before the Indian government approves the sale.
© 2011 AFP