The Hindu Business Line : HPCL Q2 net dips 30% on global crude price surge

New Delhi, Oct 29 Hindustan Petroleum Corporation Ltd’s (HPCL) performance in the second quarter ended September 30, 2007 has been impacted by high international crude prices and no change in the domestic retail selling price (RSP) of petroleum products. HPCL has reported a 30 per cent dip in net profit at Rs 853.03 crore for the quarter of the current fiscal compared to Rs 1,221.98 crore for the same quarter last year.

The company’s net sales marginally slipped to Rs 24,234.44 crore during the quarter under review (Rs 24,367.46 crore). “The impact on profitability would have been higher had it not been mitigated by increase in gross refining margins (GRM) due to rupee appreciation,” according to analysts.

The GRM for the half year were $6.26 per barrel, up from $5.74 per bbl in the corresponding period last year for Mumbai refinery and $6.14 per barrel ($5.97/bbl) for Visakhapatnam refinery. For the first half of the current fiscal the company reported a net profit of Rs 766.10 crore (Rs 614.32 crore). Net sales for the period were at Rs 46,116.14 crore (Rs 45.041.56 crore). “Financial results for the half year have been adversely affected due to high crude and product prices, which could not be fully passed on to the consumers,” the company said. The under recovery on petrol, diesel, kerosene and domestic liquefied petroleum gas for the current first half was partially compensated by way of discounts from upstream oil companies to the tune of Rs 1,837.92 crore (Rs 2,464.84 crore for April-September 2006) and in principle approval of the Government for issuance of oil bonds amounting to Rs 2,355.54 crore (Rs 2,906 crore for April-September 2006), HPCL said.

HPCL shares which opened at Rs 239.95 on BSE closed slightly lower than the previous day’s close of Rs 237.50 at Rs 237.40 on Monday.

"Lower upstream contribution due to rupee appreciation and lower oil bonds amount has impacted the numbers for the quarter. However, the market would not respond much to these numbers as it would like to see the Government policy on pricing of petroleum products before reacting," according to industry analysts.

Indian crude basket on October 26 stood at $84.78 a barrel. It averaged at $70.64 a barrel for the period April to October 26.