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 compared with a profit of ₹4,240 crore in the same period a year back.
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 a fall in crude oil prices. But 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 halving to ₹13,445 crore from ₹26,765 crore. Revenue in the fourth quarter fell to ₹21,456 crore from the ₹26,759 crore.
Mr. Shanker said 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 about ₹3,000 crore.
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