IOCL slips after reporting Q4 net loss of Rs 7783 cr

Indian Oil Corporation (IOCL) declined 2.36% to Rs 84.95 after the company reported a consolidated net loss of Rs 7782.55 crore in Q4 March 2020 as against net profit of Rs 6004.88 crore in Q4 March 2019.

Consolidated net sales of Q4 March 2020 stood at Rs 1,18,007.32, declining 6.4% from Rs 1,26,076 crore in Q4 March 2019. The result was announced towards the end of market hours yesterday, 24 June 2020.

IOCL reported a one-time loss of Rs 11,304.64 crore in Q4 March 2020 on the back of a significant fall in oil prices which lead to a write down in valuation of inventories below cost for the specified period of Rs 6,855.35 crore. The company further added that on account of the nationwide lockdown from 25 March 2020 due to COVID-19 pandemic and consequent significant decline in demand for petroleum products, as a one-time measure, a longer time period is considered for better estimation of NRV considering the most reliable evidence available in line with the provisions of lND AS 2 'Inventories'. As a result of considering a longer time period, the write down in valuation of inventories increased.

IOCL reported a pre-tax loss of Rs 17,316.70 crore in Q4 March 2020 as against pre-tax profit of Rs 9020.36 crore in Q4 March 2019. The PSU OMC received a total tax rebate of Rs 8,751.16 crore in Q4 FY20 as against total tax expense of Rs 3016.40 in Q4 FY19.

On a standalone basis, IOCL reported a net loss of Rs 5,185.32 crore in Q4 March 2020 as against a net profit of Rs 6,099.27 crore in Q4 March 2019. Net sales declined 6.2% to Rs 1,18,439.08 crore in Q4 March 2020 over Q4 March 2019.

Average Gross Refining Margin (GRM) for the period April-March 2020 declined 98% to $0.08 per barrel from $5.41 per barrel in April-March 2019. The core GRM or the current price GRM for the period April-March 2020 after offsetting inventory loss/ gain comes to $2.64 per barrel.

The company accounted for Budgetary Support off Rs 1,296.17 crore in April - March 2020 as against Rs 4,110.18 crore accounted in April - Mar 2019 as revenue grants on sale of SKO (PDS).

The PSU OMC reported a consolidated net loss of Rs 893.14 crore in fiscal year ending 2020 (FY20) as against a consolidated net profit of Rs 17,376.70 in fiscal year ending 2019 (FY19). Net sales for FY20 stood at Rs 4,84,362.25 crore, declining 8.3% from FY19.

As of 31 March 2020, the Government of India held a 51.5% stake in IOCL while ONGC held a 14.2% stake in the company. IOCL's segments include sale of petroleum products, sale of petrochemicals and other businesses.

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