The Hindu Business Line : Oil bonds boost HPCL Q4 net four-fold

Armed with oil bonds, Hindustan Petroleum Corporation Ltd has clocked a four-fold increase in net profit for the quarter ended March 31, 2006. The company, which had taken a hit in its profits for selling fuel at below-market prices, reported net profit of Rs 2,013.41 crore in the fourth quarter of the financial year 2005-06 compared with Rs 499.80 crore during the same period of the previous year.

In March, the Government had issued bonds worth Rs 11,500 crore to compensate the losses suffered by the oil marketing companies. Of this, HPCL received Rs 2,344.86 crore and this has been accounted under sales/income from operations, the company said.

To pay 30%

The total income (net of excise) increased 26.86 per cent to Rs 21,016.89 crore for the quarter from Rs 16,565.74 crore during the same period last year. The board of HPCL, which met here on Thursday, has also recommended a 30 per cent dividend of Rs 3 on shares of Rs 10 each.

But for the oil bonds the company's profitability would have been severely impacted. For the year ended March 31, 2006, the company posted a net profit of Rs 405.63 crore compared with Rs 1,277.33 crore in the last fiscal and total income (net of excise) increased to Rs 71,366.37 crore from Rs 60,188.27 crore in 2004-05.

High crude, product prices

According to HPCL, the financial results of the year have been affected due to impact of high crude and product prices, which could not be fully passed on to the consumers.

The under recovery on diesel, petrol, kerosene and domestic LPG was partially compensated by the upstream oil companies as advised by the Government. Accordingly, an amount of Rs 3,221.59 crore (Rs 1,278.34 crore in 2004-05) has been accounted for during the year towards discount received from ONGC and GAIL on purchase of crude oil, LPG and kerosene, HPCL said.

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