Oil India reports a 43% drop in its quarterly profit due to low selling prices and rising expenses

Oil India, an Indian exploration company, reported on Friday a 43% drop in its second-quarter profits. This was due to a decline in crude realisations (the price at which the product is sold), while increased expenses also affected margins.

The profit of the state-owned company, excluding earnings from joint ventures or overseas operations, dropped to 10.44 billion rupees (118.8 millions dollars) for the third quarter ending September 30 from 18.34 trillion rupees in last year's period.

The realisation of crude oil prices by the company fell 14%, to $68.19 per barrel from $79.33 a barrel.

Fuel demand in India, which is the third largest oil importer in the world, increased for two of the three quarters in the July-September period, but the company's operating revenue fell by 1.1% year-on-year, to 54.57 billion rupies.

The price of brent crude oil was down by 0.25% during the third quarter.

Total expenses for the company also increased by 22%, to 49.7 billion rupies. Operating margins fell to 13.69% in the third quarter from 30.43% one year ago.

Oil India shares fell 4.7% in the quarter July-September, while ONGC, a larger competitor, dropped nearly 2%.

(source: Reuters)