Indian Oil Corp (IOC), the nation’s biggest oil firm, on Thursday reported tripling of its net profit in December quarter as inventory gains offset lower refinery margins and forex losses.
Standalone net profit in October-December at Rs 2,339.02 crore, or Rs 2.55 per share, was higher than Rs 716.82 crore, or Rs 0.76 per share, net profit in the same period in the previous year, IOC Chairman Sanjiv Singh said.
“The variation is majorly on account of inventory gain during the current quarter against inventory loss during the corresponding quarter of the previous financial year, partly offset by lower refining margins and exchange losses during the current quarter,” he said.
The company had an inventory gain of Rs 1,608 crore in the three month period as compared to an inventory loss of Rs 8,523 crore in the third quarter of 2018-19 fiscal, he said, adding that the company’s net refinery margin stood at $2.15 per barrel in Q3 as compared to $5.12 a year ago.
Inventory gain arises when a company buys raw material (crude oil in case of IOC) at a particular price, but by the time it is shipped to India and processed into final product (fuel), international prices would have moved up. Since fuel prices are benchmarked at prevailing international rates, an inventory gain is booked. Inventory loss happens if the reverse occurs.
IOC had a forex loss of Rs 182 crore as compared to Rs 2,804 crore foreign exchange gain a year back, he said.
Revenue from operations dropped to Rs 1.44 trillion in October-December 2019 from Rs 1.60 trillion in the same period of the previous year.This, Singh said, was due to lower oil prices. The company’s consolidated net profit in October-December stood at Rs 2,695.09 crore.
For the third quarter of 2019-20, IOC’s product sales volumes, including exports, stood at 23.409 million tonnes. The refining throughput was 17.496 million tonnes and the throughput of its countrywide pipeline network was 20.962 million tonnes during the same period.
In the first nine months of current fiscal, IOC earned a net profit of Rs 6,499 crore on revenue of Rs 4.27 trillion as compared with Rs 10,795 crore net profit in April-December 2018 on a revenue of Rs 4.61 trillion.
“IOC sold 67.490 million tonnes of products, including exports, during the first nine months of the financial year 2019-20. Our refining throughput for the first nine months of FY 19-20 was 52.316 million tonnes and the throughput of the Corporation’s countrywide pipeline network was 64.562 million tonnes during the year. The gross refining margin (GRM) during the first nine months of FY 19-20 was $3.34 per barrel as compared to $5.83 per barrel in the corresponding period of the previous financial year,” he said.
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