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Indian Oil Corporation has posted a loss of Rs. 3,388 crore for the first quarter of the current financial year ended June 2010 as compared to a profit of Rs. 3,683 crore for the same quarter of the previous year. The loss was mainly on account of unmet under recoveries, lower refining margins and foreign exchange variation loss. However net sales of the company rose 23% to Rs. 71672.66 crore as compared to Rs. 58331.23 crore during corresponding previous year quarter.
The Government has decided that the pricing of Petrol and Diesel both at the refinery gate and the retail level will be market-determined. Petrol prices were completely deregulated. However, in respect of Diesel, the initial increase in retail selling price of Diesel will be Rs.2 per litre at Delhi, with corresponding increases in other parts of the country. Further increases will be made by the Public Sector Oil Marketing Companies (OMCs) in consultation with the Ministry of Petroleum & Natural Gas. The Government has also decided to increase the retail price of PDS Kerosene by Rs.3 per litre and of Domestic LPG by only Rs. 35 per cylinder (at Delhi), with corresponding increases in other parts of the country.
As a result of the decision Petrol prices increased at Mumbai from Rs 52.2 per litre to Rs 55.88 per liter, Diesel prices from Rs 39.88 per liter to Rs 41.98 per liter, LPG prices from Rs 313.45 per 14.2 kg cylinder to Rs 348.45 per 14.2 kg cylinder and kerosene prices from Rs 9.05 per liter to Rs 12.27 per liter.
According to IndianOil Chairman, Mr. B M Bansal, the under-recovery on account of non-realisation of market-related prices for Petrol, Diesel, PDS Kerosene and LPG (Domestic) for the quarter was Rs. 7,343 crore.
Mr. Bansal added that the Corporation sold 18.312 million tonnes of products, including exports, during the first quarter of 2010-11. Its eight refineries registered a combined throughput of 13.278 million tonnes, with a capacity utilisation of 103.73%. The Corporation's countrywide pipelines network too registered a throughput of 16.489 million tonnes for the quarter which is 2.38 % higher as compared to same quarter of previous year.
Average Gross Refining Margins during Q1FY'11 was USD3.00 per barrel {Q1FY'10: USD7.36 per barrel). Average Gross Refining Margins during FY'10 was USD4.47 per barrel as against USD3.69 per barrel during the corresponding previous year.
For quarter ended June 2009 OPM turned negative to 4..5% as purchase of products and crude for resale as a percentage of net sales (net of stock adjustment) increased to 50.3% for Q1 FY'11 from 44.4% in Q1 FY'10 and consumption of raw materials as a % of adjusted net sales jumped to 48.4% from 41.9%. However staff cost fell marginally to 1.4% from 1.7% and other expenditure fell to 4.0% from 5.0%. Operating profits turned to losses of Rs 2917.47 crore. In line with the scheme formulated by Petroleum Planning and Analysis Cell (PPAC), the Company has received discounts on Crude Oil/Products purchased from ONGC/GAIL/OIL/CPCL of Rs. 3671.26 crore towards under recovery suffered during the quarter on sale of MS, HSD, SKO (PDS) & LPG (Domestic) (April-June 2009: Rs. 229.10 crore on sale of MS & HSD) and the same has been adjusted against the purchase cost.
Other income fell 52% to Rs 1134.85 crore as corresponding previous year quarter includes foreign exchange gain of Rs 652.79 crore. Interest cost rose 71% to Rs 571.17 crore and depreciation rose 36% to Rs 1034.60 crore resulting loss at PBT level of Rs 3388.39 crore compared to profit of Rs 5409.57 crore in the corresponding previous year quarter. Due to uncertainty in estimation of profit for the year pending finalisation of compensation mechanism and extent thereof for under recoveries suffered on sale of MS, HSD, SKO(PDS) & LPG (Domestic) no provision has been made for current tax & deferred tax for the current quarter. Net loss during current quarter is Rs 3388.39 crore compared to profit of Rs 3682.83 crore.
For FY'10 consolidated sales were lower by 3% to Rs 238792.26 and the total income was lower by 12% to Rs 253964.10 crore. The operating profit more than doubled to 119% to Rs 16734.11 crore and the other income was higher by 5% to Rs 3595.81 crore. The interest cost was lower by 59% to Rs 1726.16 crore. The depreciation cost was higher by 11% to Rs 3555.16 crore. The taxation was higher by 223% to Rs 4049.92 crore and the PAT was higher by 359% to Rs 10998.68 crore. The minority interest and other was Rs 285.49 crore compared to a loss of Rs 203.56 crore. Thus the net profit after minority interest was higher by 312% to Rs 10713.19 crore.
Pursuant to orders pronounced by the Honourable Supreme / various High Courts in the matter of Entry Tax on crude oil, HSD & lubricants, and as advised, the company has not provided for entry tax amounting to Rs. 4097.53 crore (2009-10: Rs. 3743.19 crore) including Rs. 354.34 crore for the quarter ended 30th June 2010 in respect of Mathura & Panipat Refineries, Mundra- Panipat & Salaya-Mathura Pipelines and Asaouti Lube Blending plant. Pending final disposal of the matter by the Honourable Supreme / various High Courts, entry tax already paid / deposited / provided for at various units has not been considered for write back.
The company has a capex outlay of Rs 12825 crore for FY'11 including Rs 8680 crore for refining segment, Rs 2189 crore for petrochemcials, Rs 967 for pipelines, Rs 307 crore for marketing initiatives and Rs 682 crore for others.
The scrip is currently trading at Rs 372.
Source : indiainfoline.com
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