HPCL profit slips 3.6% to Rs 1,052 crore in Q2

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Updated: November 8, 2019 5:41:24 AM

Earnings before interest, taxes, depreciation and amortisation (Ebitda) went up by 9.3% year-on-year (y-o-y) to Rs 2,319 crore as cost of material consumed fell 18% to Rs 15,679.8 crore.

HPCL profit, Mukesh Kumar Surana, Ebitda, HPCL total network size amounts, global oil pricesThe oil refining and marketing company attributed the fall in profit to inventory losses, stemming from a fall in global oil prices.

Hindustan Petroleum Corporation (HPCL) reported a net profit of Rs 1,052.3 crore on a standalone basis for the three months ended September 30, recording an 3.6% decrease from the same period a year ago. The oil refining and marketing company attributed the fall in profit to inventory losses, stemming from a fall in global oil prices. As retail prices of petroleum products are mapped with international rates, a gradual fall of global oil prices in Q2FY20 meant that by the time HPCL sold its products after processing crude, retail rates had dipped. The inventory gain in the quarter fell to Rs 53 crore against gains of Rs 1,276 crore in the corresponding period a year ago, said HPCL chairman Mukesh Kumar Surana.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) went up by 9.3% year-on-year (y-o-y) to Rs 2,319 crore as cost of material consumed fell 18% to Rs 15,679.8 crore. Expenses from stock-in-trade purchase also decreased 6.7% to Rs 40,722.8 crore. Revenue from operations fell 9.4% y-o-y to Rs 66,164.6 crore. The company received lower returns from its refinery operations as the firm earned only $2.83 from selling every barrel of refined products in the quarter, 41.2% lower than Q2, FY19.

Including exports, HPCL sold 9.4 million tonne (mt) of petroleum product in the quarter, marking a rise of 3.3% y-o-y. Senior officials attributed the flat sales to extended monsoons dampening demand.

The planned shutdown of its Visakh refinery in September also partially contributed to lower sales. The company earned Rs 71.8 crore in the quarter from foreign currency transactions against a loss of Rs 1,424.4 crore on this front in the corresponding quarter a year ago. After adding 268 new retail outlets in the quarter, HPCL’s total network size amounts to 15,739. Also, 87 new LPG distributorships were commissioned, taking the total such distributorships to 5,979.
The company said that works to upgrade its Visakh and Mumbai refineries are in progress and the the 9-MMTPA

greenfield refinery-cum-petrochemical complex project of its unit HPCL Rajasthan Refinery is under execution. When asked if the latest government policy of relaxing norms for opening fuel retail outlets could potentially result in idling of its infrastructure, Surana said that since HPCL’s nameplate capacity is quite low and capacity utilisations are very high, there are no risks of its assets getting stranded.

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