BPCL Q1 Results: Net Profit, Revenue Fall On Lower Sales Volume
Bharat Petroleum Corp.’s profit tumbled over the preceding quarter because of lower demand and a high base.
Net profit of the oil refiner dropped 87.4% sequentially to Rs 1,501.6 crore in the three months to June, according to its exchange filing. That compares with the Rs 1,881.1-crore consensus estimate of analysts tracked by Bloomberg.
The company’s earnings had jumped more than fourfold in the January-March period on account of an exceptional income worth Rs 6,993 crore.
Q1 FY22 Highlights (QoQ)
Revenue fell 7.8% to Rs 70,921.3 crore, compared with the Rs 72,342.1-crore forecast.
Total expenditure, excluding excise duty, fell 5.5% to Rs 69,299.8 crore.
Tax expenses rose 66.3% to Rs 494.5 crore.
Operating profit declined 35.7% to Rs 3,252.7 crore.
Other income fell 72.8% to Rs 451.7 crore.
Operating margin contracted to 4.6% from 6.6%.
Gross refining margin—what a company earns by converting one barrel of crude into fuel—stood at $4.12 a barrel.
An increase in benchmark gross refining margin, higher crude oil prices that led to inventory gains, and improved product spreads aided the company during the period.
The benchmark Singapore GRM rose 16.7% sequentially to $2.1 a barrel in the first quarter. Also, Brent crude averaged at $69.1 a barrel, up 13% over the preceding three months. Petrol, diesel, and jet fuel spreads jumped 44%, 13%, and 36%, respectively, over the previous three months.
But lower consumption of petroleum products because of the local lockdowns to curtail the second Covid wave weighed on the company’s sales volumes that declined 13.8% over the quarter ended March to 9.63 million metric tonnes. Throughput fell 18.5% sequentially to 6.84 MMT.
India’s consumption of petroleum products fell 10.4% over the preceding quarter, with aviation turbine fuel witnessing the biggest drop of more than 30%, data released by the Petroleum Planning & Analysis Cell showed. Petrol and diesel demand contracted 13.2% and 10.5%, respectively, in the first quarter.
BPCL’s average marketing margin remained under pressure during the quarter under review as retail price hikes lagged the increase in crude. The prices of petrol and diesel were increased by 9% and 10.2% between April 1 and June 30, 2021 compared with a rise of 18.2% in Brent crude.
Separately, the government is planning to divest its 52.9% stake in BPCL. That’s valued at more than Rs 51,000 crore, and the sale is expected to complete in FY22.
Shares of BPCL were trading 0.34% lower after the results were announced compared with a 0.51% gain in the benchmark Nifty 50.