Indian Oil Corporation Ltd (IOC), the nation’s biggest oil firm, on Friday reported a 47% drop in its June quarter net profit as pandemic outbreak pummelled fuel demand and shrank refining margins.
Standalone net profit in April-June quarter at ₹ 1,910.84 crore, or ₹ 2.08 per share, was 46.8% lower than ₹ 3,596.11 crore, or ₹ 3.92 a share, net profit in the same period of the last financial year, the company said in a regulatory filing.
With a good part of the quarter being spent under lockdown where the vehicular movement was sparse, IOC fuel sales fell 29% to 15.25 million tonnes.
Its refineries processed 25% less crude oil at 12.9 million tonnes in the first quarter of 2020-21 fiscal.
IOC said it lost USD 1.98 on turning every barrel of crude oil into fuel in the April-June period. This compared to a gross refining margin of USD 4.69 a barrel in Q1 of 2019-20.
“The outbreak of coronavirus (COVID-19) globally and in India has impacted businesses and economic activities in general. The spread of COVID-19, along with nationwide lockdown starting from March 25, 2020, has caused a serious threat to human lives and resulted in a reduction in global demand and disruption in the supply chain, which have forced the businesses to restrict or close the operations in short term,” it said.
Income from operations fell to ₹ 88,936.54 crore in April-June from ₹ 150,136.70 crore a year back.
“The company’s sales during the month of April 2020 were impacted significantly by the nationwide lockdown and consequently capacity utilization of the plants was lower. However, the same has come back close to normal levels by the month of June 2020,” it said.