Indian Oil Corporation’s (IOC) chairman B Ashok will sign off on a high when he demits office on May 31 as the company registered a 70% growth in annual profit for 2016-17 and an 85% jump for the quarter ended March 31, 2017. Ashok will be succeeded by Sanjiv Singh who is currently the director for refineries.The country’s largest oil marketing company posted a net profit of Rs19,106 crore for 2016-17 compared with Rs11,242 crore in the previous financial year, and the net profit for the fourth quarter of 2016-17 stood at Rs3,721 crore compared with Rs2,006 crore in the year-ago period. However, the profit was down 6.8% in the quarter under review compared with the third quarter of 2016-17, the company announced on Thursday.
While income from operations of the company for 2016-17 stood at Rs4.45 lakh crore compared with Rs4.07 lakh crore in the previous year, the figures for the fourth quarter of 2016-17 was Rs1.22 lakh crore compared with Rs98,719 crore in the period a year ago. Ashok attributed the improved financials to a higher refining capacity, increased production of aviation fuel, liquefied petroleum gas, diesel and petrol, and better gross refining margin (GRM), apart from others. While the sales volume for the fourth quarter was 21 million tonne (MT), the refining throughput was 17.087 MT during the same period. The GRM for the year was at $7.77 per barrel compared with $5.06 a year ago.
The capital expenditure plan of the company for 2017-18 is Rs20,000 crore, slightly below 2016-17. However, the company spent around Rs6,400 crore last year in acquiring oil fields in Russia. An Indian consortium led by IndianOil acquired 23.9% participating interest in Vankor project and 29.9% participating interest in Taas assets of Roseneft, both in Russia. AK Sharma, director-finance, IOC, said the capital expenditure for the current financial year will be made out of internal accruals and there are no immediate borrowing plans.
Talking about the stranded tax that the company is expecting due to the roll out of goods and services tax from July 1 this year, executives said it will be around R5,000 crore. “However, the final figure will still have to be worked out,” said Ashok, adding that the company has taken up the issue with administrative ministry.