Indianoil Corp powers Q4 profit by 86% to `3,721 cr
HIGHER GROSS REFINERY MARGINS, INVENTORY GAINS ENERGISE NATIONAL HYDROCARBON COMPANY’S OVERALL PERFORMANCE
Aided by higher inventory gains on crude oil, Indian Oil Corporation reported an 86 per cent increase in net profit for the fourth quarter of 2016-17 at Rs 3,721 crore. Net profit for the corresponding quarter of the previous fiscal stood at Rs 2,006 crore. The rise in profits corresponds to higher Gross Refinery Margins. The GRM for the quarter stood at $8.95 a barrel. This was higher than the $2.99 per barrel GRM in the fourth quarter of 2015-16. Inventory gains on crude oil stood at Rs 2,634 crore. Comparably, IOCL suffered an inventory loss of Rs. 3,417 crore in the fourth quarter of fiscal 2015-2016.
The company’s Board recommended a final dividend of Rs 1 a share (10 per cent on the paid-up equity share capital) for financial year 2016-2017. An official statement said that this is in addition to the first interim dividend of Rs. 13.50 per share and second interim dividend of Rs 4.50 per share paid for 2016-17.
IOCL'S gross refinery margins for 2016-17 rose to $7.77 per barrel from $5.06 per barrel in the previous fiscal. Inventory gains stood at Rs. 12,477 crore.
The company is staring at a hit in the bottom line after the GST roll-out scheduled from July. Director (Finance) A K Sharma said, “Around Rs 5,000 crore of input credit will remain stranded due to MS (Motor Spirit or Petrol) and HSD (High Speed Diesel) not being under the Goods and Services Tax regime.”
The company is in talks with the GST council to find a way to offset this credit. Finance Minister Arun Jaitley, during the debate on the GST Bill in the Lok Sabha, had said that the Constitution provides that petroleum products would attract GST, although the rate has been kept at zero. Going forward, it would require only an executive decision on setting a rate on petroleum products. There has also been a call to include petroleum products under the GST regime.
The company has also made a saving in 2016-17 due to optimisation in crude oil procurement. Previous Indianoil Chairman B Ashok had said, “Indianoil has cut down the time of finalising short term crude oil procurement tenders from 36 hours in 2014 to less than 2 hours. The savings to Indian Oil is to the tune of over Rs 1,000 crore.”
Indianoil has also increased the share of spot purchases in the total import mix. Ashok said, “The term spot agreements comprised 80 per cent of our crude oil requirements in 2014. This has come down to 68 per cent.”
SANJIV SINGH TAKES OVER AS CHAIRMAN
Sanjiv Singh has taken over as Chairman of Indian Oil Corporation Ltd (Indianoil) with effect from June 1, 2017. Prior to his elevation, he was Director (Refineries) on the Indianoil
Board since July 2014. Concurrently, he will also be Chairman of Chennai Petroleum Corporation Ltd (CPCL) and Hindustan Urvarak and Rasayan Ltd (HURL), a joint venture company set up to revive the fertiliser plants at Gorakhpur, Sindri and Barauni.
A chemical engineer from Iit-roorkee with a Diploma in Management, Sanjiv Singh joined Indianoil in 1981. He has served the company for over 35 years, spearheading refinery operations as well as mega-greenfield and brownfield projects in refining and petrochemicals.
With extensive experience in the refining sector, Sanjiv Singh played a key role in the setting up, commissioning and stabilisation of two of Indianoil’s biggest greenfield refineries at Panipat and Paradip. The commissioning of Indianoil’s 11th refinery at Paradip in early 2016, with a capex of Rs. 34,555 crore, is his benchmark contribution to the Indian refining sector. Singh has also steered the successful implementation of the petrochemical projects of Paraxylene/ PTA and Naphtha Cracker with downstream units at Panipat Refinery.
As Director (Refineries) of Indianoil, Singh has endeavoured to improve the operation of Indianoil’s 11 refineries by revamping, debottlenecking and modernisation of process units, together with yield and profitability improvement projects, besides undertaking low-cost capacity expansions. He focussed on innovative technologies to create indigenous capability in the field of technology, while enhancing the company’s profitability. He strongly supports the commercialisation of indigenous technologies and has led many such ‘firsts’ in Indianoil refineries like Octamax (for production of high-octane fuel), indjet (production of aviation fuel), INDSK (reduction of sulphur in kerosene) and indeselect (gasoline desulphurisation).
Singh has been a driving force in conceptualising India’s mammoth 60 million tonnes per annum refinery being set-up on the West coast of India, which will transform the refining landscape of India. Playing a leadership role in the energy sector, he is partnering India’s vision of emerging as a ‘refining hub’ in South Asia. A champion of clean and green fuels, Singh ensured on-schedule rollout of BS-IV fuels across the country in April 2017 and has now set a frenetic pace for Indianoil refineries to meet the tough deadline of introducing BS-VI grade green fuels in the country by April 2020. A staunch advocate of minimum gestation time from concept to commissioning, under his stewardship approx Rs 40,000 crore worth of projects shall be in various stages of implementation in the Corporation, including capex of nearly Rs 15,000 crore in Refineries Division, in the coming three years.
Well-known for his technological prowess, innovative ideas, business acumen and people-centric leadership, he has empowered Indianoil teams to perform and deliver exceptional results through positive engagement and a shared vision.
Sanjiv Singh shares his rich experience and expertise in the field as a member of several industry associations and Government bodies. Academically inclined, Singh is widely travelled in India and abroad and has presented papers in several important national and international forums.