IN the current difficult times, India’s second-largest oil marketing company Bharat Petroleum (BPCL) achieved what its peers failed to do. Defying the problem of rising under-recoveries, the company has posted a net profit for the March ’08 quarter. The industry leader IOC had reported net losses in the latest quarter, while HPCL’s pre-tax losses got converted into profits, thanks to onetime write back of tax provisions.
While giving the positive performance, BPCL had to battle a few odds, apart from the perennial problem of under-recoveries. BPCL’s other income halved in the fourth quarter against the corresponding quarter of previous year while the production at its Mumbai refinery was 9% down due to a maintenance shutdown in March. However, a spurt in the gross refining margins (GRMs) and higher support from upstream companies and the government came to BPCL’s rescue. Particularly, the performance of its Kochi refinery, which accounts for nearly 40% of the company’s total production, was stronger. Improved business environment helped the GRMs at its Kochi refinery move beyond $9 per barrel during the quarter from $7.2 earlier. However, its Mumbai refinery, which suffers from 3% octroi charges, witnessed stagnant GRMs.
During the quarter BPCL’s net sales (excluding oil bonds) moved up 23% to Rs 28,607.1 crore. The amount of oil bonds received during the quarter was nearly four-and-a-half times higher from corresponding previous quarter at Rs 3,971.5 crore. The discounts received from upstream companies such as ONGC, Gail and Oil India doubled to Rs 2369.20 crore. However, as the other income halved and interest and depreciation costs increased, the pretax profits were just 40% of what were reported in last year. After providing for taxes the net profits at Rs 58.40 crore were less than 10% of last year.
For the entire year ended March 2008, the company posted a net profit of Rs 1,769.6 crore on a consolidated basis, which was 17% lower against year ago levels. During the year, the company received Rs 8,589.5 crore (up 64% on y-o-y) as assistance from the government and Rs 5,975.1 crore (up 34% on y-o-y) as discounts from upstream companies such as ONGC, Gail and Oil India.
The company completed the formalities of transferring its participating interests in 24 blocks in India as well as abroad to its wholly owned subsidiary Bharat Petro Resources (BPRL). The company plans to invest around $200 million in these assets during the current fiscal year.
Going forward, the company’s refinery operations are likely to benefit from improving GRMs, thanks mainly to globally high petrol and diesel prices. However, its marketing operations continue to reel under the pressure of under-recoveries. Despite the price increases earlier this month, the company continues to lose Rs 11.9 per liter on petrol, Rs 23 per liter on diesel, Rs 36 per liter on kerosene and Rs 288 per cylinder on LPG.
While giving the positive performance, BPCL had to battle a few odds, apart from the perennial problem of under-recoveries. BPCL’s other income halved in the fourth quarter against the corresponding quarter of previous year while the production at its Mumbai refinery was 9% down due to a maintenance shutdown in March. However, a spurt in the gross refining margins (GRMs) and higher support from upstream companies and the government came to BPCL’s rescue. Particularly, the performance of its Kochi refinery, which accounts for nearly 40% of the company’s total production, was stronger. Improved business environment helped the GRMs at its Kochi refinery move beyond $9 per barrel during the quarter from $7.2 earlier. However, its Mumbai refinery, which suffers from 3% octroi charges, witnessed stagnant GRMs.
During the quarter BPCL’s net sales (excluding oil bonds) moved up 23% to Rs 28,607.1 crore. The amount of oil bonds received during the quarter was nearly four-and-a-half times higher from corresponding previous quarter at Rs 3,971.5 crore. The discounts received from upstream companies such as ONGC, Gail and Oil India doubled to Rs 2369.20 crore. However, as the other income halved and interest and depreciation costs increased, the pretax profits were just 40% of what were reported in last year. After providing for taxes the net profits at Rs 58.40 crore were less than 10% of last year.
For the entire year ended March 2008, the company posted a net profit of Rs 1,769.6 crore on a consolidated basis, which was 17% lower against year ago levels. During the year, the company received Rs 8,589.5 crore (up 64% on y-o-y) as assistance from the government and Rs 5,975.1 crore (up 34% on y-o-y) as discounts from upstream companies such as ONGC, Gail and Oil India.
The company completed the formalities of transferring its participating interests in 24 blocks in India as well as abroad to its wholly owned subsidiary Bharat Petro Resources (BPRL). The company plans to invest around $200 million in these assets during the current fiscal year.
Going forward, the company’s refinery operations are likely to benefit from improving GRMs, thanks mainly to globally high petrol and diesel prices. However, its marketing operations continue to reel under the pressure of under-recoveries. Despite the price increases earlier this month, the company continues to lose Rs 11.9 per liter on petrol, Rs 23 per liter on diesel, Rs 36 per liter on kerosene and Rs 288 per cylinder on LPG.
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