State-owned Bharat Petroleum Corp Ltd's net profit trebled in the quarter ended December 2019 as refinery margins rose and inventory losses reduced, its Director-Finance N Vijaygopal said.
Consolidated net profit in October-December at Rs 2,051.43 crore was higher than Rs 698.62 crore profit in the same period a year back.
The profit was higher as the company had suffered "a huge inventory loss" in the third quarter of 2018-19 fiscal, he said, adding the company recorded an inventory gain of Rs 100 crore in October-December 2019 as compared to an inventory loss of Rs 2,000 crore in the previous year.
Also, foreign exchange losses reduced from Rs 450 crore to Rs 96 crore and the company's crude oil processing and retailing performance improved, he said.
An inventory loss is recorded when a company buys raw material (crude oil) at a given price but by the time it is able to ship it to India and convert it into fuel, rates have fallen. And since the prices are benchmarked to international rates, an inventory loss is booked. Inventory gain is recorded when the reverse happens.
The company earned USD 3.23 on turning every barrel of crude oil into fuel in the third quarter of current fiscal as compared to a gross refining margin of USD 2.78 per barrel in the same period of the previous financial year, he said, adding cracks or margins on petrol have been good.
Revenue from operation dropped to Rs 85,926.70 crore from Rs 89,324.86 crore a year ago on lower oil prices.
BPCL said pre-tax profits from its mainstay oil refining and fuel market business jumped to Rs 2,246.88 crore in October-December 2019 from Rs 637.89 crore a year ago.