 "BPCL Q2 FY25: Net profit plunges 72% to Rs 2,297 crore on higher expenses")
State-run Bharat Petroleum Corporation (BPCL) reported a 72 per cent slump in its net profit for the second quarter of the current financial year (Q2FY25) over higher expenses and weak refining margins.
For the quarter under review, BPCL’s consolidated net profit was Rs 2,297.2 crore, down from Rs 8,243.6 crore a year ago. The state-run oil marketing company’s (OMC’s) revenue was almost flat at Rs 1.02 trillion against Rs 1.03 trillion a year ago.
In a separate disclosure to BSE, the company also said, its board on Friday has decided not to pursue the earlier shared plans for fund raising through a Rights Issue. The change in plans, the company said, was owing to" improved internal generation of funds and also the communication received from MoP&NG regarding non allocation of funds for capital support of Oil Marketing Companies (OMCs) in the budget 2024-25 and hence Government of India’s non participation in the issue." The company was earlier seeking to raise funds of up to Rs 18,000 crore through a rights issue.
Expenses, in the same period, rose nine per cent to Rs 1.16 trillion. For the first half of FY25, the company reported average gross refining margins (GRMs) of $6.12 per barrel, lower from $15.42 per barrel a year ago, before factoring the impact of Special Additional Excise Duty and Road & Infrastructure Cess, levied July 2022 onwards.
BPCL also missed Street estimates, as in a Bloomberg poll, five analysts estimated a revenue of Rs 1.07 trillion and seven analysts estimated an income adjusted of Rs 3834 crore.
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Sequentially, BPCL’s net profit fell 19.2 per cent and revenue dipped nine per cent.
BPCL said, as of September 30, 2024, it had a cumulative net negative buffer of Rs 4,119.72 crore and accordingly the revenue from the sale of liquefied petroleum gas (LPG) was reduced by this amount.
The buffer relates to a Ministry of Petroleum and Natural Gas (MoPNG) circular that directed OMCs that where Market Determined Price (MOP) of LPG cylinders is less than its Effective Cost to Customer (ECC), the OMCs will retain the difference in a separate buffer account for future adjustment. However, that buffer turned negative later.
For H1FY25, BPCL reported a modest 2.45 per cent growth in market sales achieving 25.55 million tonnes (MMT) market sales from a year ago. Market sales for the quarter under review were up two per cent at 12.39 MMT from a year ago.
BPCL said, Ebitda for the quarter under review was at Rs 5,436.03 crore, lower from Rs 13,679.21 crore a year ago. Ebitda is earnings before interest, taxation, depreciation, and ammorisation. Ebitda margins for the three months were at 4.61 per cent, lower from 11.73 per cent a year ago.