Lower Interest Rates Regime Help Co Reduce Its Interest Cost By A Third
SUBSTANTIALLY lower petroleum prices helped India’s thirdlargest oil marketing company HPCL post a turnaround in the June 2009 quarter despite a weak performance of its refining business. The company reported a net profit of Rs 649 crore in the period under review against a net loss of Rs 888 crore in the year-ago period. Net sales, during the period, dipped 17% to Rs 25,819 crore.
The improved performance in the June quarter could be attributed to a host of external reasons. First, the crash in crude oil prices reduced the under-recoveries on sale of petroleum products. Second, the strengthening of rupee helped it register a forex gain of Rs 161 crore against a loss of Rs 224 crore in the corresponding quarter of last year. Third, the lower interest rates regime helped the company curtail its interest cost by a third to Rs 270 crore.
The company also achieved a better physical performance with 22% higher throughput at 4.1 million tonne during the June quarter. The company has just completed the Euro III upgradation project at its Mumbai refinery, while the project at Visakh will get over next month. The new joint venture refinery at Bhatinda under HPCL-Mittal Energy (HMEL) has achieved 35% completion and is on schedule to complete by February 2011.
Its gross refining margins — difference between cost of crude oil and price of the petroleum products — crashed to $5.71 per barrel from $16.49 a year earlier. Thanks to the auto fuels price revision earlier in July, the company is expected to continue posting profits even in the September 2009 quarter.
The impressive results have pushed the HPCL stock Wednesday’s high of Rs 338. Finally, it closed marginally higher at Rs 332 in a weak Mumbai market on Wednesday. The state-run company is now valued at Rs 11,255 crore, 5.3 times its profits for the trailing 12 months.
SUBSTANTIALLY lower petroleum prices helped India’s thirdlargest oil marketing company HPCL post a turnaround in the June 2009 quarter despite a weak performance of its refining business. The company reported a net profit of Rs 649 crore in the period under review against a net loss of Rs 888 crore in the year-ago period. Net sales, during the period, dipped 17% to Rs 25,819 crore.
The improved performance in the June quarter could be attributed to a host of external reasons. First, the crash in crude oil prices reduced the under-recoveries on sale of petroleum products. Second, the strengthening of rupee helped it register a forex gain of Rs 161 crore against a loss of Rs 224 crore in the corresponding quarter of last year. Third, the lower interest rates regime helped the company curtail its interest cost by a third to Rs 270 crore.
The company also achieved a better physical performance with 22% higher throughput at 4.1 million tonne during the June quarter. The company has just completed the Euro III upgradation project at its Mumbai refinery, while the project at Visakh will get over next month. The new joint venture refinery at Bhatinda under HPCL-Mittal Energy (HMEL) has achieved 35% completion and is on schedule to complete by February 2011.
Its gross refining margins — difference between cost of crude oil and price of the petroleum products — crashed to $5.71 per barrel from $16.49 a year earlier. Thanks to the auto fuels price revision earlier in July, the company is expected to continue posting profits even in the September 2009 quarter.
The impressive results have pushed the HPCL stock Wednesday’s high of Rs 338. Finally, it closed marginally higher at Rs 332 in a weak Mumbai market on Wednesday. The state-run company is now valued at Rs 11,255 crore, 5.3 times its profits for the trailing 12 months.
DROP-BY-DROP
The co achieved a better physical performance with 22% higher throughput at 4.1 mt during the June quarter
Because of auto fuels price revision, the co is expected to continue posting profits even in the September 2009 quarter
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