Indian Oil’s profit plunges 92% to Rs 1,313 crore in FY20

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June 25, 2020 1:00 AM

As retail prices of petroleum products are mapped with international rates, a gradual drop of global oil prices in Q4FY20 meant that by the time IOCL sold its products after processing crude, retail rates had decreased.

The company lost Rs 3,945 crore in FY20 from foreign currency transactions against losses of Rs 1,503 crore in FY19.The company lost Rs 3,945 crore in FY20 from foreign currency transactions against losses of Rs 1,503 crore in FY19.

Indian Oil Corporation (IOCL) reported a net profit of Rs 1,313.2 crore on a standalone basis for the fiscal ended March 31, recording a 92.2% drop from the same period a year ago. The state-run oil refining and marketing company attributed the fall in profit to inventory losses, stemming from fluctuations in global oil prices and foreign exchange valuations. The full-year profit was mainly dragged down by the Rs 5,185.3-crore net loss made by the company in Q4FY20, stemming from the disruption in activities due to the coronavirus crisis, against a profit of Rs 6,099.8 crore made a year ago.

As retail prices of petroleum products are mapped with international rates, a gradual drop of global oil prices in Q4FY20 meant that by the time IOCL sold its products after processing crude, retail rates had decreased. The inventory loss in the fiscal was Rs 12,531 crore against gains of Rs 3,227 crore a year ago, said IOCL chairman Sanjiv Singh. The company lost Rs 3,945 crore in FY20 from foreign currency transactions against losses of Rs 1,503 crore in FY19.

IOCL accounted a loss of Rs 11,304.6 crore as ‘exceptional item’ in the fiscal to reflect the sudden crude price and demand anomalies triggered by the coronavirus. The company sold 89.7 million tonne (MT) of petroleum products in the year, marking a marginal drop of 0.2 MT mainly due to the lockdown to contain the outspread of the coronavirus. IOCL received much lower returns from its refinery operations in the fiscal, earning only $0.08 from processing every barrel of refined products in the quarter, compared to $5.41/barrel in FY19.

The company’s borrowings in FY20 was Rs 1.17 lakh crore, recording an annual rise of 35% as capital expenditure in the year also increased 27.5% to Rs 28,316 crore. IOCL’s board of directors, on Wednesday, also approved increasing its borrowing limits from Rs 1.10 lakh crore to Rs 1.65 lakh crore.

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