The Hindu Business Line : MRPL net profit drops to Rs 9 cr

Sharp reduction in product prices, increased exports, and discounts on liquefied petroleum gas (LPG) and kerosene to state-owned oil marketing companies have led to a major dip in the net profit of Mangalore Refinery and Petrochemicals Ltd (MRPL), a subsidiary of Oil and Natural Gas Corporation Ltd (ONGC), in the second quarter of the current financial year.

The company earned a lower net profit of Rs 9 crore for the second quarter of the financial year 2006-07 (Rs 166 crore in the corresponding quarter) after providing for interest and finance charges of Rs 59 crore (Rs 44 crore), depreciation of Rs 87 crore (Rs 86 crore) and tax liability of Rs 5 crore (Rs 110 crore).

Abnormal inventory losses have depressed financial results despite highest-ever throughput of 3.21 MMT (up 3 per cent from 3.11 MMT), capacity utilisation 132 per cent (128 per cent), the company said. The turnover for the quarter under review stood at Rs 8,908 crore (Rs 7,244 crore), up 23 per cent.

The financial performance has been adversely affected mainly due to the sharp reduction in international products prices during September 2006 and increased exports at Rs 3,603 crore (from Rs 2,019 crore) where margins are lower as compared to domestic sales, the company said.

Besides, the company extends discount on LPG and SKO to PSU oil marketing companies (OMCs). The Ministry of Petroleum and Natural Gas (MOP&NG) has since viewed that MRPL could seek refund of discounts on LPG and SKO from the retailing oil companies with effect from April 1. The discounts on LPG and SKO accounted during the quarter are Rs 77 crore (cumulative for six months is Rs 142.88 crore).

During the first half of the current year (April-September 2006), the gross turnover was Rs 16,182 crore(Rs 13, 849 crore), up 17 per cent and throughput of 5.95 MMT was down 1.5 per cent (6.04 MMT). The net profit during the half-year ended September 2006 was Rs 225 crore (Rs 382 crore), down 41 per cent. Export sales during the first six months were Rs 6,400 crore (Rs 3,682 crore), up 74 per cent.

The MRPL stock closed at Rs 42.80 on the BSE on Monday. The stock price hit a day's low of Rs 42.60 and a high of Rs 43.50.