IOC Q1 EBIT up 488% on higher refining margins

30 July 2007 10:03  [Source: ICIS news]

MUMBAI (ICIS news)--Indian Oil Corporation (IOC) on Monday posted a 488% rise in operating profit to rupees (Rs) 31.1bn ($770.1m) for the first quarter ended 30 June against an operating loss of Rs5.3bn for the same period a year ago.

Analysts attributed the company’s performance to higher refining margins and foreign exchange gains made due to an appreciating rupee, which has risen 14% since last July.

"IOC’s refining margin has risen to $10.7/bbl this quarter from $6.7/bbl. Also, it has gained over Rs11bn due to the rupee appreciation," an analyst told ICIS news.

IOC’s net sales rose 8.6% to Rs528.6bn, but net profit fell 17.5% to Rs14.7bn.

The oil marketing company posted a 246% jump in profit before tax to nearly Rs21bn in the first quarter versus a loss of Rs14.4bn last year.

However, analysts said that IOC’s performance next quarter is unlikely to be in line with the first quarter, unless the central government provides the company with subsidies.

"Local refining margins are under pressure as global margins are shrinking. Also, the rupee is not likely to continue appreciating at its current pace," the analyst said.

($1 = Rs40.38)

By: Divya Chowdhury
+65 6780 4359

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