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Informist, Tuesday, Jul 30, 2024

--IOC Apr-Jun net profit 26.43 bln rupees

--Analysts saw IOC Apr-Jun net profit 24.5 bln rupees 

--IOC Apr-Jun net profit 26.43 bln rupees vs 137.50 bln 

--IOC Apr-Jun revenue 2.16 trln rupees vs 2.21 trln 

--Cumulative net negative buffer of 51.57 bln rupees as on Jun 30

--Board OKs construction of greenfield terminal at Bihta, Patna  

--IOC: Patna greenfield terminal to cost 16.99 bln rupees 

By Sayantan Sarkar

NEW DELHI – Indian Oil Corp Ltd, the country's largest crude oil refiner and fuel retailer, saw its net profit nosedive 81% in the June quarter as gross refining margin shrank and crude oil prices rose. However, the company's bottomline of 26.43 bln rupees for the quarter ended June was higher than analysts' estimate of 24.50 bln rupees.

Sequentially, too, the refiner's bottomline shrank over 45%. The average gross refining margin for Apr-Jun was $6.39 per barrel, much lower than $8.34 per bbl in the same quarter the previous year. Gross refining margin is the difference between the price of crude oil and the total value of petroleum products produced by a refinery on a per-barrel basis. It is a key indicator of a refinery's efficiency and profitability.

A rise in global crude oil prices also dented the refiner's profit in the June quarter. Oil marketing companies tend to make losses when crude oil prices rise as these companies import the commodity, which pushes up their input cost for producing petroleum products. Brent crude oil prices rose to $85 per bbl in the June quarter from $77.5 a bbl a year ago.

Revenue from operations fell over 2% on year to 2.16 trln rupees in the quarter ended June, while sequentially, the company's topline was down nearly 2%. Analysts had expected the company's topline to be 2.00 trln rupees for the reporting quarter. Additionally, Indian Oil Corp reported a cumulative net negative buffer of 51.57 bln rupees as of Jun 30 as the retail selling price was less than the market-determined price.

In Apr-Jun, total expenditure, including finance costs, was at 2.13 trln rupees compared with 2.04 trln rupees a year ago. Finance cost rose to 19.6 bln rupees from 16.26 bln rupees a year ago. The cost of raw materials rose more than 9% on a year-on-year basis to 1.04 trln rupees in Apr-Jun as crude oil prices rose sharply from last year. 

Today, the oil marketing company's board provided stage-1 approval for the construction of a greenfield terminal at Bihta, Patna, Bihar. This project, which involves the Barauni-Kanpur product pipeline and Patna-Motihari-Baitalpur pipeline, is estimated to cost 16.99 bln rupees. 

The company's domestic sales of petroleum products were at 24.06 mln tn in the June quarter, up from 23.31 mln tn a year ago. Exports in Apr-Jun rose slightly to 1.19 mln tn from 1.10 mln tn a year ago. Exports in the previous quarter were 1.54 mln tn. 

IOC's refinery crude oil throughput declined to 18.17 mln tn in the quarter ended June from 18.75 mln tn a year ago. Last quarter, refinery throughput was 18.28 mln tn. Throughput from pipelines was 25.81 mln tn in Apr-Jun compared with 24.95 mln tn in the year-ago period. In the quarter ended March, pipeline throughput was 24.59 mln tn.  

Today, shares of IOC closed 1.4% higher at 182.95 rupees on the National Stock Exchange.  End

US$1 = 83.72 rupees

Edited by Deepshikha Bhardwaj

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