ONGC's Q4 results: Strong profits, highest dividend

Oil & Natural Gas Corporation (ONGC), a Maharatna company operating across the entire oil and gas industry, announced its Q4 results at the 380th meeting of its Board of Directors on May 20, 2024. Despite a decline in revenue, the company reported a substantial jump in profits and declared its highest ever total dividend.

In this blog, let’s discuss ONGC’s Q4 results in detail, including financial performance, production highlights, and shareholder returns.

Also read: Fueling India’s growth engine: Evolution and outlook of oil & gas industry

Company profile

Making up almost 71% of India’s domestic output, ONGC is the country’s largest producer of crude oil and natural gas. The Indian government founded the corporation in 1956, and it has been involved in oil exploration for more than 60 years.

ONGC operates through various business segments, including Exploration & Production (E&P) and the Refining & Marketing of petroleum products. Geographically, the majority of its operations are offshore, contributing 88.22% to its revenue, with onshore operations adding 1.49% for 2023-24 financial year. The remaining 11.24% comes from its international ventures.

In FY 24, ONGC declared 11 new discoveries in its operated acreages, with 6 in onland areas and 5 offshore. Out of them, five are new pool finds in onland regions, while six are prospects. Additionally, 7 hydrocarbon discoveries were monetized during FY 2023-24, including 3 notified during the same fiscal year.

Through a number of joint ventures and subsidiaries, the company broadens its field of expertise. The subsidiary ONGC Videsh handles international operations.

ONGC owns a 5% stake in the India Gas Exchange. Additionally, ONGC became the first E&P company in India to trade domestic gas on this platform, with its first online trade made on May 23 2022.

Also read: Everything you need to know about Crude oil trading in India

ONGC Q4 results

ONGC’s consolidated net profit for the March quarter increased significantly. Compared to ₹6,478.23 crore during the same period previous year, the net profit increased by over 78% to ₹11,526.53 crore.

Revenue from operations for Q4FY24 slightly decreased by 0.44% to ₹34,636.69 crore. However, ONGC’s EBITDA, or operating profit, rose by 3.63% to ₹15,890.73 crore, demonstrating improved operational efficiency. The EBITDA margin expanded by 180 basis points to 45.88%, up from 44.08% in the previous quarter, indicating better profitability.

In terms of production, ONGC’s oil production for Q4FY24 stood at 5.36 million tonnes, up 2% year-over-year (YoY). Gas production, however, declined by 3% YoY to 5.1 billion cubic metres.

Brent crude prices averaged $82.8 per barrel in Q4FY24, which positively impacted ONGC’s realisations. The net realisation for nominated crude oil price was $80.81 per barrel reflecting a 4.8% YoY increase.

Gas price realisation for Q4FY24 was $6.5 per metric million British thermal unit, a decline of 24.2% YoY due to a reduction in the APM gas price cap. However, ONGC expects net gas realisations to improve, supported by premium pricing for new wells and favourable pricing proposals.

(₹ crore)	Q4 FY24	Q3 FY24	QoQ %	Q4 FY23	YoY %
Revenue from operations	166,770.60	165,569.06	0.73	164,066.72	1.65
Total expense	154,091.08	154,707.48	-0.40	150,815.92	2.17
Profit Before Tax	15,228.42	14,991.97	1.58	6,941.47	119.38
Profit After Tax	11,526.53	11,104.50	3.80	6,478.23	77.93

Source: ONGC Financial Results Q4FY24

Annual performance

ONGC achieved its record net profit (standalone) of ₹40,526 crore for FY24. The consolidated net profit also reached a record high of ₹57,101 crore, showcasing the company’s robust financial health over the year.

In terms of drilling performance, ONGC drilled 541 wells during FY24, marking the highest number in the past 34 years. This total includes 103 exploratory wells and 438 development wells.

ONGC invested approximately ₹37,000 crore in capital expenditures (CAPEX) during FY24. This represents the highest ever utilisation of CAPEX in a financial year, excluding acquisitions.

Regarding production performance, ONGC produced 21.139 million metric tonnes (MMT) of crude oil in FY24, slightly down by 1.6% compared to 21.485 MMT in FY23. Total gas production also saw a decline, with 20.648 billion cubic metres (BCM) produced in FY24, a 3.3% decrease from 21.351 BCM in the previous year.

The production of value-added products also dropped by 3.0%, with 2,519 kilotonnes (KT) produced in FY24 compared to 2,598 KT in FY23. Despite these slight declines, the company’s overall financial health remains solid.

(₹ crore)	FY24	FY23	YoY %
Revenue from operations	643,037.00	684,829.22	-6.10
Total expense	579,158.47	640,053.39	-9.51
Profit Before Tax	76,860.07	44,746.03	71.77
Profit After Tax	57,100.84	34,046.46	67.71

Source: ONGC Financial Results Q4FY24

In the ONGC share dividend history, it declared its highest ever total dividend of ₹15,411 crore. The entire dividend amounts to 245%, or ₹12.25, for each share with a face value of ₹5. An interim dividend of 195%, or ₹9.75 per share, that was already paid out during the year is included in the payout. The board has also proposed a final dividend of 50%, or ₹2.50 per share.

In the ONGC share news, as of June 3, 2024, ONGC’s share price stood at ₹280.30. The share price has risen by 80.37% in the last year.

In ONGC’s share price history, looking at a longer timeframe, ONGC’s share has appreciated by 67.34% over the past five years. These figures indicate strong market performance and investor confidence in the company’s future prospects.

Bottomline

ONGC’s Q4 and annual results for FY24 highlight its strong financial performance and commitment to growth. Despite some production declines, the company has maintained profitability and provided substantial returns to shareholders, reflecting its resilient business model and strategic initiatives.

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