Cairn Energy swings to first-half operating profit of $44m

London: Cairn Energy Plc reported a drop in first-half profit after tax on Tuesday as it sold fewer shares in its Indian unit, but at an operating level the company swung to profit from a loss in the same period last year.

Cairn said it made a profit after tax of $375 million in the first six months of the year, compared with $1.5 billion in the first half of 2007.

Cairn shares traded down 3.6 per cent at 768-1/2 pence at 0823 GMT, compared with a 1.7 per cent drop in the DJ Stoxx European oil and gas sector index.

The company reported an operating profit of $44 million, against an $18 million loss in the same period of 2007, thanks to higher oil and gas prices.

Citigroup had forecast an operating profit of $56 million while Dresdner Kleinwort had forecast $37.5 million.

Cairn raised $358.7 million from selling four per cent of Cairn India in the first half, having made a $1.5 billion gain on the IPO of the unit last year.

Cairn said it still planned to start up its biggest field, Mangala in Rajasthan, in the second half of 2009.

"The Cairn story hinges on the timely start up of the Rajasthan project. Crucially the interim results confirm that the project, including the export pipeline, is on track for (a second half of 2009) start up," analyst Keith Morris at Evolution Securities said.