The Hindu Business Line : Chennai Petro Q4 net trebles; to pay 35 pc

THE net profit of Chennai Petroleum Corporation Ltd (CPCL) for the final quarter of 2002-03 has almost trebled to Rs 225.34 crore, from Rs 79.49 crore in the corresponding quarter of 2001-02. This has happened because of better (import-parity) prices of petroleum products, which resulted in improvement in refining margins.

The gross refining margin (net prices of all products minus the cost of crude oil) was almost $7 per barrel, compared to an average realisation of $1.9 per barrel in the whole of the previous year (2001-02).

Average refining margin was about $3.9 per barrel — double the previous year's figure — as a result of which the net profit increased to Rs 302.89 crore, compared to Rs 63.71 crore — an almost five-fold increase.

The board of directors has recommended a dividend of Rs 3.5 per share (35 per cent).

During 2002-03, CPCL recorded an all-time high turnover of Rs 8,630 crore, compared to Rs 6,273 crore in 2001-02. Turnover was up on account of marginally higher throughput — 6.82 million tonnes (6.69 m.t.).

The company has taken credit for an upward valuation of inventory of Rs 100 crore. It has cautioned that, "the future profit is subject to variation of fluctuations in the prices of crude and petroleum products in the international market". In other words, the margins may not be as good as in the last year, because the crude would be bought at a higher price. Company sources said that there could be a charge to the P&L account of about Rs 50 crore on account of downward revision of inventory value in the current year.

Last year's profitability was also helped by a fall in interest costs to Rs 106.65 crore, from Rs 128.09 crore in the previous year. Addressing a press conference here, the CPCL Chairman, Mr M.S. Ramachandran, and Managing Director, Mr S.V. Narasimhan, said that the three-m.t. expansion project at Manali in Chennai would be completed by December.

The Rs 96-crore jetty project at Nagapattinam was completed in March last year. Till then, vessels were bringing crude to the Chennai port and the crude was being taken to the Nagapattinam refinery by road by hundreds of tankers. But now, the vessels can unload at the jetty. The resultant saving in costs works out to about Rs 450 per tonne of crude — in a full year, it could mean a saving of about Rs 12 crore.

Last year, CPCL paid a tax of Rs 160.97 crore, but Mr Narasimhan said that from next year, for several years to come, the company would pay taxes only under MAT, because of the depreciation cover that the Rs 2,360-crore expansion project would give.

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Chennai Petro Q4 net trebles; to pay 35 pc