The state-owned Oil and Natural Gas Corporation Ltd on Tuesday reported a 17.7 per cent decline in net profit to Rs 8,664 crore (Rs 86.64 billion) during 2003-04 on account of sharing cooking gas and kerosene subsidy burden with oil marketing companies and an appreciation of the rupee to the dollar.

The company's bottomline dropped 46 per cent to Rs 1,986.36 crore (Rs 19.863 billion) during the fourth quarter of 2003-04 against Rs 3,678.4 crore (Rs 36.784 billion) during January-March 2003. Income during the fourth quarter dropped 31.4 per cent to Rs 8,787.71 crore (Rs 87.877 billion).

"Subsidies were the only reason for the decrease in net profit and turnover," ONGC chairman Subir Raha said at a press conference.

Subsidies and rupee appreciation by 5.1 per cent brought down ONGC's net realisation to $27.4 a barrel, while gross realisation was estimated at $29.9 a barrel during 2003-04. The company realised $28.5 a barrel during the previous fiscal.

Raha said that the company's profit margin had decreased from 29.8 per cent in 2002-03 to 26.3 per cent in 2003-04, return on capital employed also decreased from 54 per cent to 42.2 per cent and earnings per share was down from Rs 73.4 to Rs 60.76 at the end of March this year.

During the year, ONGC took a Rs 2,690 crore (Rs 26.90 billion) hit owing to the subsidy on kerosene and cooking gas and lost another Rs 1,100 crore  (Rs 11 billion) on account of appreciation of the rupee to the dollar.

The company cited the same reasons for a 6.8 per cent decrease in its turnover to Rs 32,180 crore  (Rs 321.80 billion) during the year ended March 31, 2003.

ONCG declared a dividend on Rs 24 a share, including an interim dividend of Rs 14, which will result in an outgo of Rs 3,422 crore (Rs 34.22 billion). ONGC contributed Rs 16,288 crore  (Rs 162.88 billion) to the government's kitty through taxes and dividend.

ONGC's crude production was almost stagnant at 26 MMT following a disruption of the Mumbai High-Uran trunk pipeline, while production of gas and value added products decreased marginally.

The turnover of the group, comprising ONGC Videsh, ONGC Nile Ganga and MRPL, crossed $10 billion, closing the year with a turnover of Rs 45,302.27 crore  (Rs 453.022 billion) and a net profit of Rs 9,380.26 crore (Rs 93.802 billion).