The Hindu Business Line : HPCL makes Rs 1,222-cr profit

Hindustan Petroleum Corporation Ltd has reported a net profit of Rs 1,222 crore for the quarter ending September 30, 2006 as against a loss of Rs 22 crore during the same period last year. The company's profits have been boosted by higher discounts from upstream oil companies such as ONGC, besides subsidies paid by the Government.

Thus, while the company received a mere Rs 669 crore by way of discounts and nothing by way of subsidy from the Government in the corresponding quarter last year, it has succeeded in getting Rs 1,796 crore as discounts and Rs 2,906 crore as subsidy in the current quarter.

The subsidy accounted in the current quarter, however, pertains to the under recoveries that the company had suffered during the whole of the six-month period of the current year 2006-07. The entire sum has been accounted as sales in the current quarter. Consequently, the operating margin, which was barely above zero (0.1%) this time last year, has shot up to roughly 7.5 per cent.

Higher interest rates

While interest costs have gone up from around Rs 31 crore this time last year to a little over Rs 98 crore, depreciation has practically remained stationary at Rs 174 crore (Rs 1,74 crore last year), tax provision is higher at Rs 344 crore (Rs 28 crore) in the current quarter.

Gross refining margin at the company's refinery in Visakhapatnam was lower at $5.97 per barrel of oil in the first half of the current year, as against $6.45 per barrel during the same time last year, the company has claimed in its release to the Bombay Stock Exchange.

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