Aban April-June net surges on firm rig hire rates

MUMBAI, July 21 (Reuters) - Oil services firm Aban Offshore Ltd (ABAN.BO: Quote, Profile, Research) saw a two-and-a-half times rise in net profit in April-June on firm rig hire rates and higher other income, analysts said.

Aban's net profit in the quarter rose to 715.1 million rupees from 283.8 million rupees a year earlier. Net sales nearly doubled to 2.47 billion rupees. Other income rose 59 percent to 245.4 million rupees.

With most of the oil production in the next five years likely to come from offshore oilfield exploration, firms are scouting for oil-drilling rigs, which are in short supply.

"Numbers are better on lower-than-expected interest charge and higher other income," Ajit Motwani, an analyst with Emkay Shares, said.

The company paid 320 million rupees as interest on debt during the quarter, as against an expected 390 million rupees, Motwani said. Hire rates for four out of the seven rigs owned by the company has shot up by 250 percent in the quarter, Motwani added.

"Day rates for offshore drilling rigs and supply vessels have risen during the quarter due to a surge in exploration and production and short supply of such vessels," a Mumbai-based analyst said requesting anonymity.

Several shipping firms such as Mercator Lines (MRCT.BO: Quote, Profile, Research), Great Eastern Shipping (GESC.BO: Quote, Profile, Research) and Varun Shipping (VRNS.BO: Quote, Profile, Research) are focussing more on the offshore segment to cash in on the soaring crude oil prices, they said.

Officials at Aban Offshore were not available for comments.

Shares in the company have fallen 4.9 percent in the quarter outperforming the CNX Midcap Index's 16 percent drop. On Monday, they fell 0.7 percent to 2,658.95 rupees in the Mumbai market. (Reporting by Swati Pandey; editing by Sunil Nair)