The Hindu Business Line : Indian Oil pumps up nine-fold rise in Q1 profits

New Delhi, July 30 Foreign exchange gains, lower interest coupled with inventory gains have helped Indian Oil Corporation Ltd (IOC) post a nine-fold jump in net profit for the first quarter of the current fiscal.

The company’s net profit for the quarter ended June 30, 2009, stood at Rs 3,682.83 crore up from Rs 415.13 crore in the same quarter last fiscal.

Speaking to newspersons after the board meeting, Mr Sarthak Behuria, Chairman, IOC, said, “Lowering of crude oil prices has had a positive impact on all oil marketing companies. Higher profit during the quarter was mainly on account of inventory gains, foreign exchange gains and lower interest.”

Foreign exchange gains during the quarter under review were Rs 652.79 crore, while inventory gains on fuels were Rs 1,733 crore for the period.

Mr Behuria said this year’s profit also included that of Bongaigaon Refineries Ltd, which was merged with the company in March.

The company saw a 21.3 per cent dip in turnover for the quarter to Rs 63,521 crore (Rs 80,735 crore). The drop in turnover was due to lower price realisation on products sold by the company, he said.

gross refining margin

IOC’s average gross refining margin during the quarter ended June 30, 2009, was $7.36 a barrel ($16.81 a barrel). “Last year was unprecedented as far as crude price was concerned,” he said.

“The company has suffered net under-realisation of Rs 2,961.08 crore during the quarter on sale of kerosene and domestic LPG,” he said.

In line with the scheme formulated by the Petroleum Planning and Analysis Cell, the company has received discounts on crude oil and products purchased from ONGC, GAIL (India), Oil India Ltd, and CPCL of Rs 229.10 crore towards part of under-recovery suffered on sale of petrol and diesel during the quarter under review, he said adding that the same was adjusted against the purchase cost.

On borrowings, Mr Behuria said it had come down from Rs 44,972 crore as on March 31 to Rs 33,678 crore at the end of June 30, 2009. The borrowing cost of IOC has also come down to around 6 per cent. The company’s revenue from sale of petroleum products stood at Rs 52,853.68 crore against Rs 79,172.81 crore in the same quarter last year.

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