Hit by a sharp rise in the fuel subsidy bill, state-owned Oil and Natural Gas Corporation (ONGC) on Wednesday reported a 5 per cent drop in its net profit in the quarter ended December 31, 2011. ONGC reported a net profit of Rs.6,741.41 crore in the October-December quarter as opposed to Rs.7,083.23 crore a year ago. It said the royalty it pays not just on its 30 per cent stake but also 70 per cent interest of Cairn India on crude oil produced from prolofic Rajasthan block is now being treated as cost recoverable. Cairn India does not pay royalty on its 70 per cent interest and prior to its takeover by London-based mining group Vedanta Resources, it considered royalty paid by ONGC was not recoverable from revenues earned from oil sales. But post the Vedanta deal, Cairn India treats royalty as a cost recoverable item like other taxes. As a result, an income of Rs.3,142 crore received from Cairn India towards royalty paid for the period August, 2009, to September, 2011, has been disclosed as an exceptional item.

The board of directors of the corporation has declared an interim dividend of Rs.6.25 per share.

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Philips Carbon Black

Lower offtake by the tyre sector and dumping by China have dented the performance of Philips Carbon Black in the third quarter of the current fiscal. While riding on the back of a price increase, the top line grew by 19 per cent touching Rs.514.90 crore. The post-tax profit dropped by 31 per cent to Rs.19.60 crore.

The company said that its capacity utilisation had dropped in the face of lower offtake by tyre companies and higher imports of carbon black at dumping prices. Sales volumes were down by 17 per cent during the quarter.

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Orchid Chemicals

Orchid Chemicals and Pharmaceuticals has reported a loss of Rs.11.06 crore at the net level (on a consolidated basis after taking into account an exceptional item loss of Rs.49.07 crore) in the third quarter ended December 31, 2011, against a profit of Rs.56.62 crore in the same period in the previous year.

Revenue went up by 4 per cent to Rs.496.80 crore from Rs. 478.50 crore in the year-ago period. In the nine-month period ended December 31, 2011, revenue grew by 13 per cent to Rs.1,411.80 crore from Rs.1245.60 crore in the year-ago period. The net profit after tax was Rs.82.20 crore compared to Rs.97.40 crore.

“Higher interest charges due to the hardening of interest rates coupled with the exchange loss on outstanding foreign currency loans have impacted the bottom line in the third quarter, The exceptional item loss is a point-in-time restatement and with strengthening rupee, the company will have a write-back on this account”, said K. Raghavendra Rao, Chairman and Managing Director in a press release.

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