Oil bonds boost HPCL Q4 bottom line

HPCL has reported a su
26 May 2006

HPCL has reported a substantial jump in fourth quarter net profits as the government settled part of the subsidy on retail prices by issuing oil bonds to the marketing companies. Despite the oil bonds, the company has seen significant erosion in bottom line for the full year 2005-06.

For the quarter ended 31 March 2006, HPCL has reported a net profit of Rs2,013.41 crore – an increase of 302.84 per cent over Rs499.8 crore reported for the same quarter of previous year. Total revenues increased 27.37 per cent to Rs21,016.89 crore from Rs16,500.37 crore during the previous year quarter.

Operating profits increased 327.84 per cent to Rs1,952.75 crore from Rs456.42 crore. Operating margins as a percentage of net sales improved to 9.37 per cent from 2.78 per cent.

HPCL received a total of Rs2,344.86 crore as oil bonds from the government to compensate for the under-recovery in sale of refined products. This entire amount has been accounted during the fourth quarter and hence the operating margins are not comparable.

Other income for the quarter increased 54.88 per cent to Rs180.98 crore from Rs116.85 crore during the previous year quarter.

Interest costs for the quarter increased 248 per cent while depreciation charges were lower by 7.08 per cent.