With higher refining margin and inventory gains, country's biggest oil retailer Indian Oil Corp (IOC) on Tuesday reported 40% jump in the March quarter net profit of Rs 5,218 crore as compared to Rs 3,720.62 crore net profit in the same quarter of the preceding financial year, according to IOC Chairman Sanjiv Singh.
The PSU retailer also earned $9.12 on turning every barrel of crude oil into fuel in the fourth quarter of 2017-18 fiscal as compared to $8.95 per barrel gross refining margin a year ago. Besides, the company made an inventory gain of Rs 3,442 crore during the quarter.
Inventory gain arises when a company buys oil at a price but by the time it is able to transport it to refinery, process it and turn it into fuel, the rates move up. Since retail prices are decided on the rate prevalent on the day of sales, there is an inventory gain. There would be an inventory loss if the reverse happen.
“IOC's turnover rose to Rs 1.36 lakh crore in the fourth quarter of last financial year ended March 31, from Rs 1.24 lakh crore in the year-ago period,” The IOC chief said.
The company sold 20.8 million tonnes (MT) of petroleum products during the last quarter of 2017-18, higher than 19.64 MT domestic sales a year-ago. Exports too were up at 1.76 MT from 1.46 MT.
The Board of the company recommended a final dividend of Rs 2 per share (20% on the paid up equity share capital) for the financial year 2017-18. This is in addition to the interim dividend of Rs 19 per share paid earlier.
For the full year, net profit was at an all time high of Rs 21,346 crore on a turnover of Rs 5.06 lakh crore. This compares with a net profit of Rs 19,106 crore on turnover of Rs 4.45 crore in 2016-17.