HPCL posts Q2 net profit of Rs 2,090 cr

Hindustan Petroleum Corporation Q2 result announced its return to profitability.

State-owned Hindustan Petroleum Corporation Ltd (HPCL) announced its return to profitability today,posting a net profit of Rs 2,090 crore for the second quarter of FY’11 on the back of government subsidy support.

“Net profit in the July-September quarter was Rs 2,089.61 crore as against a net loss of Rs 136.68 crore in the year-ago period,” HPCL Chairman and Managing Director Subir Roychowdhary told reporters here.

The company lost Rs 6,833 crore on sales of diesel,domestic cooking gas and kerosene below the imported cost during the first half of the current fiscal. Of this,the government gave Rs 2,832.17 crore in cash.

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Upstream firms like ONGC provided another Rs 2,278 crore. “We had to absorb a Rs 1,723 crore loss,” he said. The company did not get any compensation from the government in the second quarter last fiscal,which caused it to suffer a net loss for the three-month period.

HPCL is likely to lose Rs 13,600 crore on subsidised fuel sales during the full fiscal,as it continues to sell diesel at a loss of Rs 2.62 a litre,while the under-recovery is Rs 201.53 per cylinder of LPG and Rs 15.71 per litre of kerosene.

He said the company earned USD 2.66 on every barrel of crude oil processed in the July-September quarter,up from a USD 1.80 per barrel gross refining margin in the same period a year ago.

Domestic fuel sales increased to 5.86 million tonnes from 5.61 million tonnes a year ago.

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The company’s net sales increased to Rs 30,709.73 crore in the second quarter ended September 30,2010,from Rs 24,456.15 crore in the same quarter last fiscal.

During the first half of the current fiscal,HPCL registered a turnover of Rs 61,002 crore,as against Rs 51,687 crore in the corresponding period of the previous year.

The company’s net profit for the April-September,2010,period declined to Rs 205 crore from Rs 512 crore in the same period last fiscal.

Roychowdhary said HPCL plans to import 240,000 tonnes of petrol this fiscal to meet double-digit growth in domestic demand. Of this,130,000 tonnes has already been imported till date and another 60,000 tonnes has been tied up.

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Besides petrol,40,000 tonnes of kerosene has also been imported this year,he said.

HPCL Director (Finance) B Mukherjee said the company plans to raise USD 200 million from overseas borrowings by March,2011,as domestic rupee debt has become more costlier.

Rupee borrowings were 3.5-4 per cent costlier than overseas dollar debt,he said,adding that the company currently has an outstanding debt of Rs 22,000 crore.