New Delhi: In Q4 of FY2019-20, state-run HPCL (Hindustan Petroleum Corporation Ltd) has recorded a massive drop of 99 percent in its net profit on the back of inventory losses and exchange rate fluctuations. HPCL posted a net profit of Rs 27 crore for the quarter ended March, down from Rs 2,970 crore in the corresponding quarter of FY2018-19. It must be noted that the Q4 period of FY2019-20 included only a week of the lockdown imposed to contain the spread of the Coronavirus pandemic.
For the full financial year 2019-20, HPCL recorded net profit Rs 2,637 crore, a drop of 56.3 percent from Rs 6,029 crore for the previous year.
HPCL registered a 2.2 percent drop in gross sales at Rs 71,268 crore as compared to Rs 72,840 crore in Q4 of the previous financial year. This was on account of a sharp fall in crude prices during the March quarter. The company also declared a final dividend of Rs 9.75 per share.
Gross sales for FY2019-20 was Rs 2,86,250 crore, down 3.2 percent from Rs 2,95,713 crore for the previous year.
In the January-March period of FY2019-20, HPCL recorded domestic sales volume of 9.25 MMT against 10.03 MMT for the corresponding quarter of the previous financial year.
"Financial Year 2019-20 especially in the last quarter has seen an unprecedented event like the outbreak of Covid-19 pandemic leading to nationwide lockdowns and demand contraction on the back of generally sluggish global economic activities," HPCL said in a release.
"This coupled with the inability of oil-producing countries to reach a consensus to rebalance the supply-demand situation lead to unprecedented volatility in crude oil and product prices, and also in exchange rates," it added.
HPCL said that surplus inventories, lower demand and geopolitical situations led to one of the steepest falls in crude oil prices seen in the last two decades, and the nationwide lockdown to contain the spread of the pandemic in India lead to a significant demand contraction in the last part of March 2020, necessitating regulated refinery operations.