Q4 Results: IOC Profit Misses Estimates In March Quarter

Workers perform maintenance work on Indian Oil Corp. tanks at Cochin Port in Cochin, India. (Photographer: Dhiraj Singh/Bloomberg)

Indian Oil Corporation Ltd.'s quarterly profit declined the most in over an year despite higher revenue from its core businesses.

Net profit for the state-owned oil marketer rose nearly 34 percent quarter-on-quarter to Rs 5,220 crore in the three months ended March, IOC said in a stock exchange filing today. That compares with the Rs 5,710 crore estimated by analysts polled by Bloomberg. The bottom line was boosted by an “inventory gain of Rs 3,442 crore compared to Rs 2,634 crore in the same quarter previous year”, Director-Finance AK Sharma said at a press conference.

Inventory gains also aided the operational performance. Earnings before interest, tax, depreciation and amortisation rose 17 percent to Rs 11,021 crore, higher than the estimated Rs 9,645 crore. The operating margin contracted to 9.4 percent from 12 percent in the previous quarter. That was better than the 8.2 percent estimated.

IOC earned $9.12 for every barrel of crude that it processed during the March quarter compared to $12.3 per barrel in the three months ended December.

Shares of IOC fell over 1.5 percent to Rs 163 after the company reported its earnings.

Other Highlights

Revenue grew 6 percent sequentially to Rs 1.37 lakh crore, higher than than the consensus estimate of Rs 1.17 lakh crore.
Revenue from petroleum products rose 3.96 percent to Rs 1.31 lakh crore quarter-on-quarter
Revenue from petrochemicals increased 8.37 percent to Rs 5,099.01 crore.
Revenue from other business activities rose 22.58 percent to Rs 2,373.24 lakh crore.
Board recommended a final dividend of Rs 2 per share for the financial year 2017-18.

Shielding Against Iran Sanctions

IOC is working on a strategy to ensure that the country's oil supply doesn't get impacted by America's decision to withdraw from the Iran nuclear deal and re-imposition of sanctions on the Middle-East nation, IOC Chairman said.

The company is working on alternative strategies for crude oil purchases to offset potential cut in imports from Iran – India's third-biggest oil supplier, he added.