Hindustan Petroleum Corp Ltd (HPCL) on Wednesday reported more than doubling of its second quarter net profit on the back of a surge in refining margins and inventory gains.
Net profit in July-September came at Rs 2,477 crore as compared to Rs 1,052 crore a year back, HPCL Chairman and Managing Director Mukesh Kumar Surana told reporters on a call.
"The significant improvement in the profitability in spite of challenges including lockdown due to COVID-19 pandemic was a result of strategic planning in refinery and marketing operation, containing the de-growth to less than the industry, efficient inventory management and effective production placement," he said.
Gross sales revenue at Rs 61,340 crore was lower than Rs 66,165 crore of Q2 of the previous financial year due to lower oil prices.
The firm earned USD 5.11 on turning every barrel of crude oil into fuel in the second quarter of 2020-21 fiscal as compared to a gross refining margin of USD 2.83 a barrel.
This included a USD 2.33 per barrel inventory gain from buying cheaper crude oil earlier and processing in Q2. This translated into Rs 1,780 crore of gain. Besides, the firm also had a forex gain of Rs 524 crore, he said.
Surana said the nationwide lockdown imposed to contain the spread of the pandemic in India led to significant demand contraction of petroleum products in April 2020 and the sales were down by over 48.5 per cent as compared to the previous year.
"However, with the subsequent relaxations announced by the central and state governments and gradual opening up of economy, the demand of petroleum products picked up sharply. Overall sale of petroleum Products has reached to the level of 98 per cent in September 2020 compared to the sales in September 2019," the HPCL CMD said.
Domestic sales volume during July-September was 8.10 million tonnes compared to 8.95 million tonnes last year, which was 90.5 per cent of the last year volume during the same period.
The firm also achieved an overall combined capacity utilisation of over 100 per cent at its refineries by optimising the day to day crude run rate and regulating the product procurements from other sources.
The HPCL refineries processed 4.06 million tonnes of crude oil in the quarter July to September 2020 compared to 4.56 million tonnes last year.
HPCL recorded 22.5 per cent jump in lube sales during the quarter compared to same quarter last year and continued to be largest lube marketer of India. It also exported 9,000 tonnes of lubes during the period and added new geographies to its market reach.
During the quarter, 303 new retail outlets were commissioned taking the total retail outlet network to 17,171 as of September 2020. HPCL also commissioned 37 new LPG distributorships during the quarter, taking the total LPG distributorships to 6,153 as of September 2020.
"To ensure availability of alternate fuels and offering more choices to customers, CNG dispensing facilities were commissioned at 103 retail outlets during April to September 2020, taking the total number of retail outlets with CNG facilities to 574," he said. "With commissioning of 42 mobile dispensing equipment during the period to for door-to-door delivery of diesel, the total number of mobile dispensing equipment were enhanced to 60."
EV charging facility has been provided at 36 outlets.
Surana said in an endeavour to create value for its stakeholders, HPCL has decided to announce a 'share buyback' programme for the company's equity shares to a maximum value Rs 2,500 crore at a maximum price of Rs 250 per share.
