IOC posts net profit of Rs 3,056 crore in third quarter

Indian Oil Corporation (IOC), the nation's largest fuel retailer, on Friday posted a net profit of Rs 3,056 crore for the third quarter ended December 2015, on the back of the slump in global crude oil prices and improved refinery performance.

This compares with a net loss of Rs 2,636 crore reported in the corresponding quarter last financial year.

"The improvement is mainly attributed to increased refining and petrochemical margins apart from reduced financing cost," Chairman and Managing Director B Ashok said in a post-result media conference. Total income of the company, however, dipped 22 per cent to Rs 84,111 crore from Rs 107,893 crore in the same quarter last financial year.

The company's gross refining margin (GRM) stood at $5.96 per barrel during the December quarter as against a negative GRM of $7.73 per barrel in the corresponding quarter. "Without the impact of inventory losses, the GRM would have gone up to $10.97 per barrel from $10.47 per barrel in the comparable quarter," Ashok said.

The public sector refiner suffered from inventory losses of Rs 4,477 crore during the three months ended December 2015, a 65-per cent decline over inventory losses of Rs 12,840 crore in the corresponding quarter in 2014-15.

IOC's underrecoveries on subsidised sales of petroleum products came down to Rs 1,939 crore in the quarter ended December as compared to underrecoveries of Rs 8,900 crore in the corresponding quarter last financial year. "Of the gross underrecoveries of Rs 1,939 crore during the quarter, Rs 1,733 crore has been received from the government as cash subsidy," IOC Director (Finance) A K Sharma said.

Sharma also informed the total size of the oil pool account with the company -- that houses the extra subsidy paid by the government over and above the level of under-recoveries -- has swelled to Rs 3,071 crore. The centre has capped kerosene subsidy at Rs 12 per litre and liquefied petroleum gas (LPG) subsidy at Rs 14 per kg.

IOC's domestic sales during the third quarter rose 3.7 per cent to 19.1 million tonne. The firm's refining throughput increased 4.5 per cent to 14.4 mt while pipeline throughput improved 6.2 per cent to 20.4 mt in the third quarter ended December 2015.

Ashok also informed the company is on track to meet the current financial year's capital expenditure (capex) target of around Rs 14,000 crore and the firm is looking at a capex of around Rs 17,000 crore next financial year. The capex may go up in case some of the overseas acquisitions IOC is targeting materialise.

Ashok said IOC plans to take up a stake "running into double digits" in a Russian oil asset. IOC and Oil India have signed a non-binding agreement with Russian oil firm Rosneft for taking 10-per cent stake each in the Taas-Yuryakh field in east Siberia. IOC is also seeking a stake in the Vankor field in Russia, where ONGC purchased a 15-per cent stake last year.

The company's share price at the Bombay Stock Exchange on Friday closed at Rs 364.65, down 2.2 per cent as compared to previous close.