Bharat Petroleum Corp Limited Q2 profit jumps 58%
We had excellent results both physical and financial. First-quarter refinery performance was dismal due to Covid-19 lockdown. Our strategy of buying crude oil prices at low prices in May and June
New Delhi: Privatisation-bound Bharat Petroleum Corp Ltd (BPCL) on Thursday reported 58 per cent jump in September quarter net profit on the back of inventory gains and a rise in refining margin. Consolidated net profit at Rs 2,589.52 crore in July-September compared to Rs 1,502.63 crore in the same period a year ago.
“We had excellent results both physical and financial. First-quarter refinery performance was dismal due to Covid-19 lockdown. Our strategy of buying crude oil prices at low prices in May and June has resulted in substantial refinery margin,” BPCL Director (Finance) N Vijayagopal told reporters.
The company earned $5.8 on turning every barrel of crude oil into fuel in the second quarter of the current fiscal as compared to a gross refining margin (GRM) of $3.38 per barrel. The company had an inventory gain of Rs 2,503 crore in July-September as compared to an inventory loss of Rs 26 crore in the year-ago period, he said.
An inventory gain happens when a company buys crude oil at a particular rate but by the time it is able to process it, the prices have gone up. And since the retail rates are benchmarked at prevailing prices, an inventory gain is booked. An inventory loss happens in case of a reverse event.
He said the company’s finance cost has come down primarily because of total borrowing coming down by about Rs 10,000 crore to Rs 27,850 crore as of September 30 and foreign exchange fluctuations. BPCL’s refineries processed 5.63 million tonnes of crude oil in July-September, up from 5.14 million tonnes in the preceding three months but lower than 7.66 million tonnes processed in the year back period. Sales fell almost 13 per cent to 8.94 million tonnes in the second quarter.
