HPCL net zooms 157 pc in Q1 on better performance

The company had an inventory gain of Rs 633 crore in the April-June quarter as compared to an inventory loss of Rs 536 crore in the same period a year back. "There was a significant fall in demand of petroleum products in the month of April 2020 due to lockdowns to contain the spread of COVID-19 pandemic in the country and the sales were down by over 48.5 per cent as compared to April 2019.


PTI | New Delhi | Updated: 06-08-2020 19:55 IST | Created: 06-08-2020 19:50 IST
HPCL net zooms 157 pc in Q1 on better performance
Representative image Image Credit: ANI
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Hindustan Petroleum Corp Ltd (HPCL) on Thursday reported a 157 per cent jump in its June quarter net profit on the back of inventory gains and better than industry performance. Consolidated profit of Rs 2,252.65 crore, or Rs 14.78 per share, was 156.7 per cent higher than Rs 877.48 crore, or Rs 5.76 a share, earning in the same period a year back.

"This was achieved despite the challenges of COVID pandemic due to relatively better physical performance (than industry) in the market sales and higher capacity utilisation in refineries," HPCL Chairman and Managing Director Mukesh Kumar Surana told reporters. The net profit rose despite sales falling to Rs 45,945.48 crore in the first quarter of 2020-21, from Rs 74,595.64 crore a year back.

During April-June, HPCL achieved a domestic sales volume of 7.24 million tonnes against 9.82 million tonnes in the same period previous year - a degrowth of 25.8 per cent as against 29.2 per cent degrowth for PSU oil marketing companies, he said, adding the company's refineries operated at over 100 per cent of capacity during the COVID-19 period. The company had an inventory gain of Rs 633 crore in the April-June quarter as compared to an inventory loss of Rs 536 crore in the same period a year back.

"There was a significant fall in demand of petroleum products in the month of April 2020 due to lockdowns to contain the spread of COVID-19 pandemic in the country and the sales were down by over 48.5 per cent as compared to April 2019. "However, with the relaxations announced by the Central Government and some of the State Governments related to the movement of people, goods, and services, the demand for petroleum products gradually improved subsequently," he said.

Sales of petroleum products in May 2020 was 77 per cent compared to May 2019 and sales in June 2020 was about 91 per cent as compared to June 2019. The sales of retail petrol and diesel - which was down by 62 per cent and 55 per cent, respectively, in April 2020, compared to April 2019 - improved to about 85 per cent in June 2020 compared to the same month of 2019.

However, with some states re-imposing lockdowns, the demand for all petroleum products has fallen to 84 per cent in July. Petrol demand has come down to 89 per cent and diesel to 83 per cent, he said.

"July normally has a dip in demand in petrol because of the onset of monsoon. Diesel demand in the agriculture sector also reduces. This year, some local lockdown in cities like Bangalore and Pune has led to a bigger fall," he said. "I however do not see any structural change in demand pick up." The demand will pick up again in the third quarter of this fiscal (October-December) when monsoon recedes and festival seasons start. Demand will reach 85-90 per cent in Q3 "but to reach 100 per cent, it will take some time," he said.

For reaching pre-COVID level public transport and offices have to resume. Also, aviation sector was to return to normal, he said. During the quarter, the sales of domestic packed LPG increased by 24.7 per cent, while retail petrol and diesel reduced by 37 per cent and 32.4 per cent, respectively, compared to the same period last year.

HPCL's refineries at Mumbai and Visakh processed 3.97 million tonnes of crude during April-June, 2020 as against 3.92 million tonnes a year back. "HPCL refineries registered a capacity utilisation of 101 per cent during the period," he said. HPCL earned USD 0.04 on turning every barrel of crude oil into fuel during the quarter, as compared to a gross refining margin of USD 0.75 per barrel during the corresponding quarter last year.

"The COVID-19 pandemic is globally inflicting high economic and human costs causing a slowdown of economic activity. Specific to the Corporation, it did have an impact on the sales in the months of April and May 2020 though substantial recovery is seen in June," HPCL said..

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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