The Hindu Business Line : Under-recoveries drag BPCL net down 60%

Mumbai May 24 Bharat Petroleum Corporation has reported a 60 per cent drop in its fourth quarter net profit; its bottomline dragged down because of under-recovery on diesel, kerosene, motor spirit and domestic cooking gas.

Being a public sector company, BPCL could not fully pass on the impact of high crude oil and product prices to its customers. Its net profit for the period amounted to Rs 670 crore, against Rs 1,683 crore for the corresponding year-ago quarter.

Net sales for the period rose 6.5 per cent, to Rs 24,127 crore from Rs 22,643 crore, while other income more than doubled, to Rs 254.7 crore (Rs 118 crore). ]

Total expenditure rose by 10.25 per cent, to Rs 22,853 crore (Rs 20,726 crore). Interest costs, at Rs 164 crore, nearly doubled.

Refining margins

For the fiscal 2006-07, the company's net profit rose five-fold aided by an increase in gross refining margins. It was also helped along by oil marketing Government of India special bonds received by the company.

BPCL reported a net profit of Rs 1,805.5 crore for the year, from Rs 291.6 crore a year earlier.

Gross refining margin during the year was $3.64 per barrel for the Mumbai refinery of the company, up from $1.64 per barrel a year ago. GRM for the Kochi refinery was $3.46 per barrel ($3.17 per barrel).

Net sales rose 26.6 per cent, to Rs 97,560 crore (Rs 77,036 crore). Other income rose substantially to Rs 733 crore (Rs 465 crore).

Special bonds

The company received special bonds amounting to Rs 5,247.9 crore, more than twice than what it got the previous year. This was treated as income from operations. Compensation from upstream oil companies ONGC and GAIL brought Rs 4,462 crore towards discount received for purchase of crude oil, LPG and kerosene.

Total expenditure for the year rose 23.7 per cent, to Rs 94,144 crore (Rs 76078.6 crore). Interest costs at Rs 477 crore nearly doubled from a year ago.

Sales volumes for the year increased to 23.45 million tonnes (mt), from 21.63 mt in the previous year. The increase in sales was mainly in LPG (5.68 per cent), aviation fuel (29.3 per cent), lubes (15.28 per cent), retail diesel (15.81 per cent) and motor spirit (6.5 per cent). Sales of LSHS were down by 22.24 per cent and naphtha by 13.06 per cent.

The board recommended a final dividend of 10 per cent, taking the total dividend for the year to 160 per cent.

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