Indian Oil 2nd most profitable PSU; posts Rs 10,399 crore profit in FY16

Indian Oil Corp (IOC) on Friday reported a record net profit of Rs 10,399 crore in 2015-16 to become nation's second most profitable PSU, even as it posted an 80% drop in March quarter earning because of inventory losses.

Net profit of Rs 10,399.03 crore in fiscal year ended March 31, 2016 was second only to Oil and Natural Gas Corp's Rs 16,004 crore net profit in 2015-16 fiscal. IOC net profit in 2015-16 was almost double of Rs 5,273.03 crore net profit in the previous fiscal, company Chairman B Ashok told reporters here.

"We have had an outstanding year in terms of both operating performance and profit," he said. Refineries processed a record 56.2 million tons of crude oil 2015-16, up from 53.6 million tons in the previous year while fuel sales soared 6 per cent to record 72.7 million tons. IOC maintained its leadership position with 45.5 per cent market share.

Petrochemical sales were up 2% to 2.538 million tons, he said. Turnover, however, dipped 11.4% to Rs 450,738 crore on back of drop in oil prices.

"The profit in 2015-16 is the highest ever and better than Rs 10,200 crore profit in 2009-10," he said. The profit was aided by sharp drop in revenue loss or under-recoveries on sale of LPG and kerosene because of crash in international oil prices.

Under-recoveries dropped from Rs 39,758 crore in 2014-15 to Rs 7,757 crore in 2015-16. All but Rs 9 crore of the under-recoveries were met by government subsidy or dole from upstream firms like ONGC.

Ashok said debt had come down to Rs 52,469 crore as on March 31, 2016 from Rs 55,248 crore a year earlier. Also, the company has cut down on procurement cost and inventory losses for the full year have almost halved to Rs 9,731 crore. But for the January-March quarter, IOC posted an 80 per cent drop in net profit to Rs 1,235.64 crore.

"This was due to inventory loss of Rs 3,335 crore as against Rs 871 crore inventory loss in Q4 of 2014-15," he said adding there was also a provision of Rs 881 crore made for impairment of asset following sharp fall in crude oil prices.

Also, Rs 612 crore has been provisioned for increase in rental for petrol pumps in the national capital. "For oil companies profitability should be looked at from the point of view of the full year," he said.

The company earned USD 8.7 on turning every barrel of crude oil into fuel in the January-March quarter, up from a gross refining margin of $3 a barrel a year earlier. Low oil prices meant turnover dropped to Rs 80,449.57 crore in the fourth quarter of 2015-16 fiscal from Rs 93,830.13 crore a year ago. Shares of Indian Oil closed 3.01 per cent up at Rs 414.05 apiece on BSE.