New Delhi: Hindustan Petroleum Corporation Ltd (HPCL) on Thursday reported a record net profit of Rs 2,355 crore in the December quarter on the back of inventory gains it made from rising oil prices.
It posted a net profit in October-December at Rs 2,354.64 crore compared with Rs 747.20 crore in the same period a year back.
The profit was higher because of inventory gains made by "favourable crude oil movement" and forex gains from rupee movement, HPCL Chairman and Managing Director Mukesh Kumar Surana told reporters on an earnings call.
The company recorded an inventory gain of Rs 1,323 crore in the third quarter of the current fiscal as crude oil bought at lower prices got converted and sold when rates had risen.
With the appreciation of the rupee, HPCL had foreign exchange gains of Rs 297 crore as compared to Rs 82 crore a year back.
"Efforts to optimise operating costs and borrowing costs has further helped in profitability improvements," he said.
HPCL, the nation's third-largest state oil refiner, earned USD 1.87 on turning every barrel of crude oil into fuel in the October-December quarter as compared to a gross refining margin (GRM) of USD 1.79 a barrel the previous year.
Fuel sales, which had halved immediately after a nationwide lockdown was imposed to curb the spread of coronavirus pandemic, have returned to normal for HPCL, he said.
"During October-December 2020, the domestic sales of petroleum products of HPCL increased to 10.03 million tonnes, registering a growth of 2.7 per cent over the corresponding quarter of the previous year compared to industry growth of 0.30 per cent," he added.
HPCL's petrol sales rose 6.4 per cent while diesel was up 1.2 per cent and LPG 5.9 per cent.
"While the growth rates of diesel and LPG were higher than the industry average, the growth of petrol was at par with the industry," he said.
HPCL is the first firm to reach pre-COVID sales in a quarter. Other state-owned fuel retailers are a shade below normal.
Its refineries operated at 100 per cent capacity, processing 4 million tonnes of crude oil into the fuel during the quarter.
Finance cost halved to Rs 132.30 crore in the quarter.
"The international oil market faced an unprecedented volatile environment in 2020, impacted massively by COVID-19 pandemic, restrictions imposed during consequent lockdowns and the resultant demand collapse.
“Subsequent relaxations announced by concerned authorities helped in a quarter-on-quarter improvement in demand with December 2020 recording highest consumption of petroleum products in last 11 months i.e. after January 2020," he said.
The aggregate demand of petroleum products for the period April-December reached 88 per cent of the demand for the same period last year.
"Strategic planning and scheduling in refinery and marketing operation, effective inventory management and placement of products backed by its strong marketing infrastructure and dedicated efforts of workforce helped HPCL in containing the de-growth to less than the industry and run its refineries near to design capacities," Surana said.
"This was duly supported by favorable crude price movements leading to inventory gains and rupee strengthening," he added.
Continued weakness in product cracks, however, kept refinery margins on the lower side.
To ensure the availability of alternate fuels and offering more choices to customers, CNG dispensing facilities were commissioned at 149 retail outlets during April to December 2020, taking the total number of retail outlets with CNG facilities to 620.
With the commissioning of 135 mobile dispensing equipments during the period for door-to-door delivery of diesel, the total number of mobile dispensing equipment was enhanced to 153.
EV charging facilities have been provided at 44 retail outlets.
To cater to the growing demand for premium fuel from the rising population of high-end cars and performance bikes in the country, HPCL introduced High octane rating premium petrol 'Power 99' two years back which is now available in 21 cities across India.
"We added 1,543 new petrol pumps since April 2020 and plan to add about 450 more by the end of the fiscal in March. We plan to add a similar number of 2000 outlets in the next financial year," he said.
HPCL now has 18,019 petrol pumps across the country.
On the share buyback programme started in November, he said so far 4.07 crore shares have been bought for Rs 885.42 crore. This is 35 per cent of the targeted share buyback.
(PTI)
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