BPCL Q4 Results: A Trifecta Of Troubles Amounts To Rs 1,361 Crore Loss
State-run refiner Bharat Petroleum Corp. Ltd. reported larger-than-expected quarterly loss on Wednesday as it was hit by a trifecta of weak refining margins, inventory losses and lower sales due to the Covid-19 lockdown.
Net loss stood at Rs 1,361 crore during the January-March quarter compared with a profit of Rs 1,261 crore in the previous three months, according to its exchange filing. Analysts’ estimates compiled by BloombergQuint had pegged loss at Rs 373 crore.
- Revenue fell 7.7% sequentially to Rs 68,991 crore—higher than the estimated Rs 62,435 crore.
- Operational loss stood at Rs 619 crore compared with a operating profit of Rs 2,703 crore last quarter.
- Margin contracted to -0.9% from 3.6%.
Global crude oil prices tumbled in Janauary-March due to an all-out price war between Russia and Saudi Arabia-led OPEC and falling demand amid the novel coronavirus outbreak. The fall in prices meant refiners who bought the existing stock at a higher rate ended up selling it cheaper, resulting in inventory losses for oil retailers.
BPCL reported an exceptional loss of Rs 1,081 crore due to this. That, in turn, meant that the gross refining margin—what oil firms earn for refining one barrel of crude—turned negative.
Besides, a nationwide lockdown to curb the spread of Covid-19 meant that production and sales fell. BPCL’s crude throughput declined 0.23% sequentially to 8.39 million metric tonnes. Sales volume, too, fell 9 percent in the same period to 11.24 million metric tonnes.
The company said that the full impact of the lockdown is yet to come. “The impact of Covid-19 pandemic on the physical and financial performance of the company for the year 2019-20 was lesser as compared to the months of April and May 2020.”
BPCL’s said that there was a “significant fall” of 55% in demand for petroleum products during April. Even with relaxations in May, sales were lower by 30%.
On Wednesday, BPCL shares rose 2.17% to Rs 349.05 apiece on the BSE while the benchmark Sensex gained 0.84% to end the day at 34,109.54 points. The quarterly results were declared after market hours.