Slips Into Loss On Lower Marketing Margins, Forex Hit


Bharat Petroleum Corp. slipped into loss missing estimates in the first quarter on lower marketing margins, other income and foreign currency loss.

The oil marketer reported a net loss of Rs 6,148 crore in the quarter ended June compared with a profit of Rs 2,560.4 crore in the preceding three months, according to its exchange filing. The consensus estimate of analysts tracked by Bloomberg was loss of Rs 4,640.7 crore.

Revenue from operations for the quarter rose 12% sequentially to over Rs 1.38 lakh crore on higher sales.

The other income for first quarter almost halved to Rs 329.3 crore compared with Rs 602.1 crore in the preceding three months.

Other expenses included Rs 966 crore on account of foreign exchange loss in the first quarter compared with Rs 47.82 crore loss a year earlier.

BPCL Q1FY23 Highlights (QoQ)

  • Operating loss of Rs 23166.8 crore vs loss of Rs 13152.9 crore.

  • Operating margin was negative (-16.7%) vs (-10.7%).

  • Gross refining margin—what a company earns by converting one barrel of crude into fuel—stood at $27.51 per barrel in the fiscal ended June 2022 against $4.12 a year earlier.

  • Benchmark Singapore gross refining margin rose to $25 a barrel in the first quarter from $1.8 in the preceding three months.

  • Rising benchmark GRM and improved petrol spreads supported BPCL’s refining margin in the first quarter.

Vetsa Ramakrishna Gupta, director (finance) of BPCL, said, “Our refineries have performed exceptionally well supported by robust international cracks of petroleum products.” This resulted in GRM moving up to $27.51 per barrel in the first quarter, he said.

Market sales rose 22% year-on-year to 11.76 million metric tonnes in Q1FY23 on account of low base effect and higher turnout at BPCL fuel stations, Gupta said.

However, despite robust GRM’s, the company reported a net loss in the first quarter due to heavy losses in marketing business. Pursuant to Ministry of Corporate Affairs order, Bina refinery (erstwhile Bharat Oman Refineries Ltd.) was also amalgamated with BPCL. The financial performance of Bina refinery has also been included in BPCL with effect from July 1, 2021, Gupta said.

Shares of BPCL ended 0.7% higher on Aug. 5 compared with a 0.15% gain in the benchmark BSE Sensex.


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