IOC Q4 Earnings: Indian Oil Corporation (IOC) clocked a significant dip in net profit for the March quarter (Q4) on Tuesday, citing losses in its petrochemical business and reduced margins due to a pre-election fuel price cut amid rising input costs. In the January-March period, IOC's net profit fell to Rs 4,837.69 crore, a steep drop from Rs 10,058.69 crore in the same quarter last year and Rs 8,063.39 crore in the previous quarter, according to the company's stock exchange filing.
The decline in profit was attributed to lower refining margins, a negative turn in the petrochemical segment, and the recent Rs 2 per litre price cut for petrol and diesel. IOC also reported a Rs 1,017 crore loss from maintaining domestic cooking gas prices without government compensation.
Despite the quarterly dip, IOC achieved its highest-ever annual net profit of Rs 39,618.84 crore in the full fiscal year 2023-24, a significant increase from Rs 24,184.10 crore in 2021-22.
The annual profit was bolstered by the extended freeze on petrol and diesel prices, although the trend was disrupted by rising crude oil prices in 2022 following Russia's invasion of Ukraine. However, moderated international rates in most of 2023 allowed IOC to achieve strong profits.
In mid-March, the company reduced petrol and diesel prices by Rs 2 per litre, a decision made just ahead of the general elections as crude oil prices began to rise. Before the price cut, the breakeven point for petrol and diesel was a crude oil price of $73-74 per barrel. This month, India's import basket of crude oil averaged $89.52 per barrel.
During the January-March quarter, IOC faced a Rs 400 crore loss in the petrochemical sector, while its earnings from petroleum product sales dropped by 38 per cent.
In terms of fuel sales, the company sold 23.73 million tonnes of petroleum products in the quarter, a slight increase from 22.95 million tonnes a year ago and 23.32 million tonnes in the previous quarter. For the full fiscal year, fuel sales rose to 92.31 million tonnes, up from 90.65 million tonnes.
Revenue for the quarter dipped to Rs 2.21 lakh crore from Rs 2.28 lakh crore the previous year. For the full fiscal year, revenue fell to Rs 8.71 lakh crore from Rs 9.41 lakh crore in 2022-23.
IOC reported earning $12.05 for converting every barrel of crude oil into fuel in 2023-24, down from the previous fiscal's $19.52 gross refining margin. Besides the Rs 1,017 crore loss on LPG for the fiscal year, the company is also carrying Rs 4,796 crore in uncompensated costs from past years.
While petrol and diesel prices have been deregulated, the government provides subsidies to oil companies to maintain LPG rates below cost during certain periods.
IOC announced a final dividend of Rs 7 per equity share for 2023-24, in addition to the interim dividend of Rs 5 per share paid during the year.
Chairman SM Vaidya said, "IOC sold 97.551 million tonnes of products, including exports, during FY23-24. Our refining throughput for FY23-24 was 73.308 million tonnes, and the throughput of the corporation's nationwide pipeline network reached 98.626 million tonnes during the year."