New Delhi: Indian Oil Corporation, the country's largest company in terms of turnover, on Friday returned to black in the December quarter on the back of a robust refining margin, improvement in performance and lower finance costs.
Net profit in the October-December quarter of this fiscal year came in at Rs 3,056.86 crore as against a net loss of Rs 2,636.80 crore in the corresponding period a year ago, IOC chairman B Ashok told reporters here.
"The profit is mainly because of lower inventory losses, besides performance improvement," he said.
The company's inventory loss came down to Rs 4,477 crore in October-December 2015, from Rs 12,840 crore in the previous fiscal year.
Inventory losses arise when the company buys oil at a price, but by the time it ships crude to India and processes the same into fuel, the rates would have fallen, lowering the value of the inventory.
Mr Ashok said the company earned $5.96 on turning every barrel of crude oil into fuel compared with a negative gross refining margin (GRM) of $7.73.
Excluding inventory losses, GRM in October-December should have been $10.97 per barrel as against $10.47 a year ago.
Finance cost came down to Rs 611 crore in the third quarter, from the Rs 929 crore earlier, he said.
IOC refineries processed 4.5 per cent more crude oil at 14.424 million tonnes while sales rose 3.7 per cent to 19.10 mt.
"Broadly, there are 2-3 key elements. We have done well on all physical parameters - refinery throughput is up, pipeline throughput has increased and sales have been higher," he said.
Mr Ashok said the company lost Rs 1,939 crore on selling kerosene and cooking gas LPG at government-controlled rates.
Out of this, it got Rs 1,733 crore in cash subsidy from the government and is hopeful of getting the remaining Rs 206 crore in the fourth quarter.
IOC's borrowing came down to Rs 49,120 crore as on December 31, 2015 as against Rs 55,000 crore at the beginning of the fiscal year.
Turnover decreased from Rs 1,07,983.75 crore for the quarter ended December 2014 to Rs 84,111.87 crore for the quarter to December 2015 because of a fall in global oil rates.