The fourth quarter earnings of Indian Oil Corporation (IOC) were operationally in line with estimates but the street is waiting for the Paradip volumes in FY18 as the big cue.
B Ashok, Chairman, IOC in an interview to CNBC-TV18 spoke about the gross margins, Paradip Refinery and Chennai Petro
Gross Refining Margins (GRMs)
Overall we have had an outstanding year of performance. While GRMs are also a factor if international crude prices and so on, it is also a matter to be considered that the operational performance has to sustain and that is where I think we've played a major role. We have had all refineries operating at high levels of throughput and we had a record level of throughput for the current year.
Paradip Refinery
Paradip for the quarter has also been good but it was in a stabilisation phase and the impact of that will be seen in the current fiscal. But rest of the refineries doing very well.
Our refinery throughputs have actually improved by 13.8 percent in the last quarter. We have done 2.068 m tonnes more refining than the corresponding period in the last quarter of last year.
Chennai Petro
In this scenario of great volatility in the market, a standalone business cannot sustain itself in the long run. Chennai Petro was under great difficulty, they were recording losses continuously for over three years, they had even reported themselves in terms of the losses that they are making in terms of the net worth falling to below 50 percent, and they had to report themselves to BAFR.
However, over the last couple of years again they have improved their performance and we had declared record profits during the current year for Chennai Petro which is a great turnaround story by itself. The environment has been conducive, the operational performance has been excellent but a standalone refinery will continue to have the problem that it has and it is always better for an integrated entity to handle that.
IOC reported 6.8 percent quarter-on-quarter (QoQ) fall in the net profit to Rs 3,720 crore for the quarter ended March 31 on Thursday, which was slightly below CNBC-TV18 poll of Rs3,796 crore.
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