The Hindu Business Line : IOC net drops 31.4 pc in Q2 despite higher sales

FACED with lower retail margins, Indian Oil Corporation has recorded a 31.4 per cent decline in net profit during the second quarter of the current fiscal as compared with the corresponding period in the previous year.

The drop in profits comes even as the sales have risen 26.5 per cent during the period under review.

The Fortune 500 oil major has recorded a net profit of Rs 1,239 crore on a turnover of Rs 31,462 crore for the second quarter ended September 30, 2004. For the corresponding period last year, the company recorded a net profit of Rs 1,808 crore on a turnover of Rs 35,864 crore.

With rising crude prices over the last six months, IOC's refinery business yielded good profits.

The high refinery margins have, however, been more than offset by the burden owing to non-revision of retail product prices.

For the half-year ended September 30, 2004, IOC's gross refinery margins stood at $7.15 per barrel against $3.63 in the previous corresponding period.

At the retail end, IOC has lost around Rs 1,000 crore in the six-month period on sale of petrol and diesel.

During the corresponding period in the previous year, the company made money, according to a senior company official.

On sale of LPG and kerosene, the company lost around Rs 2,800 crore during April-September 2004 compared with Rs 800 crore during April-September 2003.

The second quarter results are dismal for the additional reason that IOC's 7.5-million-tonne Mathura refinery was shut for maintenance.

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