Currency loss hits the IOC, net down 12% in the second quarter

Indian Oil Corp.'s net profit (IOC) for the second quarter of the current fiscal year fell 12% to Rs. 3,247 crore rupees, as against Rp. 3,696 crores, due lower margins and foreign exchange losses, a factor that also affected the other two state-owned oil trading companies – BPCL and HPCL – during the quarter under review.

Indian Oil earnings dipped, although operating revenues reached 1.51,567 crore rupees in September, compared to Rs. 1,10,653 crores for the same period of the year former. The foreign exchange loss during the quarter was about Rs. 2,000 crore. The refinery gross margin for the last quarter was $ 6.79 per barrel, up from $ 7.98 a year ago.
The inventory gain – a higher achievement due to higher prices for crude and products – stood at 4,408 million rupees in the second quarter of the previous fiscal year. with Rs 1,056 crore in the period of last year. The company has a debt of about 59,000,000,000 rupees.

The company absorbs 1 liter of diesel and gasoline sold since October 5, when the government announced measures to limit the surge in retail fuel prices. While losses on this account will begin to accumulate from the third quarter, the company expects a loss of revenue of Rs. 2,200 crore in the second half of the current fiscal year. "We have neither recovered nor intended to recover the absorbed Rs 1. If we do so, the decision will be unimportant, "said Indian Oil President Sanjiv Singh.

Although the company has already placed an order for Iran's crude oil for November, it still has to order for December. Of the total crude oil refined by the company over the course of a year, 14% comes from Iran which faces US sanctions as of Nov. 4.

"We hope to continue importing Iran's Iranian exports will not be good for the international market. We have an alternative for quantities, but crude prices will be affected, "said Singh. At the time of the sanctions, the company had made a partial payment in euros and a part in rupees, and these options are again explored. "We will need to see what options are available," Singh said.

The company is also seeking to raise funds through external commercial borrowing and has launched a syndication. "It could be $ 500 million or $ 1 billion – it will depend on the response and the rates we get," said AK Sharma, chief financial officer.