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Hit by falling crude prices, HPCL reports 87% fall in net profit to ₹247.5 crore

Our Bureau Hindustan Petroleum Corporation Ltd (HPCL) has reported a ₹247.55-crore net profit for the third quarter of FY19. This is 87 per cent lower than the ₹1,949.69-crore profit reported by the company in the corresponding quarter of FY18.

“The decrease in profit is mainly due to inventory losses caused by falling crude prices and higher fuel and loss component,” said HPCL Chairman MK Surana.

In a statement to the exchanges, HPCL said the company’s board has declared an interim dividend of ₹6.50 per equity share of face value of ₹10 each for FY19.

“The combined gross refinery margin (a measure of the gain per barrel of crude oil refined) during the October-December 2018 period was $3.72 per barrel as compared with $9.04 a barrel in the corresponding previous period,” Surana said.

He added that inventory loss (a measure of the loss per barrel of crude oil under processing due to price changes in the international market) stood at $6.29 per barrel. This brought down the bottomline by ₹3,465 crore. In the same period last fiscal, HPCL reported an inventory gain of ₹2.94 per barrel.

To mitigate these losses, HPCL is taking steps to arrest the fluctuations due to inventory loss or gains. “We currently hedge around 8 per cent of our product and we have managed to gain despite the inventory fall in that quantity…We have been hedging for the past two years and it has been a process under learning,” he said.

Commenting on crude oil import from Iran, Surana said that HPCL intends to import the same volumes as the current financial year (roughly 0.7 million tonne) from Iran in the next financial year.

In response to queries on the status of ONGC not being the categorised as the promoter of HPCL, Surana said, “We have got a clarification from the centre asking us to add ONGC in the list of promoters. But, we have sought some more clarity on the same and will do so when we get it.”

Source: The Hindu Business Line


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