Indian Oil Corporation (IOC), the nation’s largest oil company, on Saturday announced a marginal increase in net income in the second quarter of the current fiscal year, with lower inventory gains offsetting better operating performance.
Net profit of Rs 6,360.05 crore, or Rs 6.93 per share, in July-September, compared to Rs 6,227.31 crore, or Rs 6.78 per share, during the same period a year ago , according to the company’s filing with the stock exchanges.
Sequentially, net profit was above the Rs 5,941.37 crore earned in the April to June quarter.
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Officials said the flat net profit was largely due to lower inventory gains in the second quarter.
In the second quarter of last year, the company saw significant inventory gains, but this year they were lower, they said.
The inventory gain occurs when a company buys raw materials (crude oil in the case of IOCs) at a particular price but is able to transform them into finished products (gasoline, diesel, etc.) , rates have gone up. Since retail prices are compared to prevailing international prices, an inventory gain is recognized. A loss of inventory is recognized when the reverse occurs.
IOC said it sold nearly 19 million tonnes of fuel in July-September, up from 17.7 million tonnes last year.
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With demand returning with a rebound in the economy, refineries turned 15.27 million tonnes of crude oil into fuel in the second quarter, up from 13.96 million tonnes last year.
Revenue rose 46% to Rs 1.69 lakh crore as international oil prices hit multi-year highs.
Better operational performance was also offset by higher spending, which jumped nearly 50 percent in July-September.
The IOC further stated that its board of directors has approved an interim dividend of 50% (Rs 5 per share) for the year 2021-2022.
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For the first half of the current fiscal year, net profit climbed 51 percent to Rs 12,301.42 crore. Income increased to Rs 3.24 lakh crore in April-September from Rs 2.04 lakh crore a year ago.
The company made $ 6.57 turning every barrel of crude oil into fuel from April to September.
âThe basic gross refining margin (GRM) or current GRM price for the period April-September 2021 after compensation for inventory loss / gain is $ 3.47 per barrel,â he said. .
IOC’s operations, including the sale of fuels such as gasoline, diesel, LPG and patches, were “significantly affected” last year after mobility restrictions were imposed to curb the spread of the demand for Covid-19.
âHowever, since then the impact has reduced significantly, as evidenced by the physical performance from April to September 2021,â the IOC said.
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