IndianOil registers Rs 414 cr loss in Q4, faces cash crunch
Ahemdabad   29-May-2008
Flagship refiner-marketer IndianOil Corporation on Wednesday said it will limit motor fuels sales to what it can produce at its refineries domestically since it has no money to import petrol or diesel. The statement from company chairman Sarthak Behuria came after the state-owned company posted a Rs 414.27 crore loss in the quarter ended March 31 against a profit of Rs 1,502.69 crore in the previous corresponding period. This is the first time since 2005 that the state-owned company has posted a quarterly loss. Government bonds and other incomes helped the company to retain a standalone net profit of Rs 6,962.58 crore for the full 2007-08 fiscal but it marked a 7.16% decline from a net profit of Rs 7,499.47 crore in the 2006-07 fiscal. Total income rose to Rs 71,792.82 crore for the quarter under review from Rs 53,818.75 crore in the year-ago period. The company's board declared a dividend of 55% for the year 2007-08. That is, for every share of face value Rs 10, the shareholder would get a dividend of Rs 5.50. Behuria said the company is losing Rs 300 crore per day on sale of petrol, diesel, cooking gas and kerosene and would run out of cash to even import crude oil by September-end if fuel prices are not raised or duties cut. He said IOC was willing to meet a demand growth of 12-15% against actual rise of 22%. Crude oil price is ruling at over $130 a barrel in the international market and the company is losing Rs 16.34 per litre on sale of petrol, Rs 23.49 on diesel, Rs 28.72 on kerosene and Rs 305.9 on each cooking gas cylinder. Behuria Said the loss on fuel sales had forced the company to put on hold all new projects. "We don't have the ability to finance new projects. Our borrowings have risen to over Rs 41,000 crore from Rs 35,000 crore. We already have a debt-equity ratio of 1:1 and there is a limit up to which we can borrow," he said and saw borrowing rise to Rs 55,000 crore in next few months. "Beyond that we cannot borrow as we will not be able to service the debt." Behuria said the company earned a gross refining margin of $8.77 per barrels in Q4 against $5.74 a barrel in the same period in the previous year. Refining margin is the profit from processing of one barrel of oil. In 2007-08, it had posted a refinery margin of $9.02 per barrel as opposed to $4.19 a barrel hi the previous year.