Lower refining margins hit BPCL hard, net down 52%

Written by fe Bureau | Mumbai | Updated: Jan 29 2010, 08:18am hrs
Hurt by lower refining margins, state-run Bharat Petroleum Corporation Ltds (BPCL) net profit has more than halved to Rs 379 crore for the December quarter from Rs 799.84 crore in the corresponding quarter of the previous financial year. Revenues for the quarter remained more or less flat, up by about 1% to Rs 32,648.49 crore as against Rs 32,184.63 crore.

Analysts observed that the gross refining margins (GRM) of the companys Mumbai refinery, which is its biggest with a 12 million metric tonne capctiy, worked out to just 0.3 $ per barrel for the quarter while for the Kochi refinery, GRM was $2 per barrel. Analysts were surprised by the weak GRMs, even though the refining industry was hit by the downturn and GRMs in the region have been weak. The benchmark Singapore Complex, for instance, saw a GRM of $1.4 for the quarter.

For the nine months up to December 2009, the oil marketing company posted a net profit of Rs 834 crore as against a net loss of Rs 2, 892 crore in the corresponding period of the previous year. Revenues for the period declined 22% at Rs 91,428 crore as against Rs 1,16,504 crore. The GRM for the company as a whole during the nine month ended December 31, 2009, was $1.44 per barrel.

For the quarter ended December 2009, BPCLs earning per share dropped 52.58% to Rs 10.49 from Rs 22.12 in the December 2008 quarter. Meanwhile, shares of the company closed the day at Rs 542.55, down 2.24% on the Bombay Stock Exchange on Thursday.

The gross under-recovery in the third quarter up to December, was Rs 990 crore while for the nine months till December 2009, it stood at Rs 6,038 crore. Under recoveries are shortfalls in revenues due to the low state-set selling prices of auto fuels and cooking gas. BPCL said that it will commence fuel supplies from its Bina refinery in Madhya Pradesh by September 2010.