BPCL declines 3% on Q4 pre-tax loss of Rs 2,959 crore, recovers later

Shares of Bharat Petroleum Corporation Ltd (BPCL) slipped to a low of Rs 337.65, down 3.2 per cent, on the BSE on Thursday after the company reported a consolidated pre-tax loss of Rs 2,958.91 crore for the March quarter of FY20 (Q4FY20). In the year-ago quarter, the oil marketing company (OMC) had reported a profit before income tax of Rs 4,961.79 crore. 

The stock, however, pared losses later and was trading marginally high at Rs 350.5 apiece, up 0.4 per cent, on the BSE at 10:08 am. In comparison, the benchmark S&P BSE Sensex was at 34,092.57 level, down 16.97 points or 0.05 per cent.

On a standalone basis, the pre-tax loss was Rs 2,068.87 crore, compared to profit of Rs 4,595.14 crore in Q4FY19.

Consolidated loss after tax for the period was at Rs 1,819.56 crore against a profit of Rs 3,131.66 crore a year ago. BPCL’s average gross refining margin (GRM) for the full year of FY20 was at $2.50 per barrel, against $4.58 per barrel in FY19.

BPCL reported an exceptional loss of Rs 1,081 crore due to oil pricing sliding drastically during the quarter. The fall in prices meant refiners who bought the existing stock at a higher rate ended up selling it cheaper, resulting in inventory losses for oil retailers. That, in turn, meant that the gross refining margin—what oil firms earn for refining one barrel of crude—turned negative.

In a separate filing, the OMC the whole of oil industry including BPCL witnessed a significant drop in crude oil prices and

general fall in demand for products in the aftermath of Covid-19. BPCL’s crude throughput declined 0.23 per cent sequentially to 8.39 million metric tonnes. Sales volume, too, fell 9 per cent in the same period to 11.24 million metric tonnes. 

The company said that the full impact of the lockdown is yet to come. “The impact of Covid-19 pandemic on the physical and financial performance of the company for the year 2019-20 was lesser as compared to the months of April and May 2020.”

BPCL’s said that there was a “significant fall” of 55 per cent in demand for petroleum products during April. Even with relaxations in May, sales were lower by 30 per cent YoY.