Hindustan Petroleum Corporation (HINDPETRO) Q4 04/05 earnings summary

Executive summary

• FY05 revenue rose 14.8% to Rs. 64,689.51 crore, while net profit fell 32.9% to Rs. 1,277.33 crore amid crude-product price mismatches and LPG/kerosene subsidy costs.

• Refinery throughput, market sales and refining margins reached record levels; the year’s MOU performance received an Excellent rating.

• Strategy centers on downstream capacity and infrastructure upgrades, risk management, rural and retail growth, and expansion into exploration, gas and other businesses.

Financial highlights

• Sales turnover Rs. 64,689.51 crore vs Rs. 56,332.57 crore; gross profit Rs. 2,381.83 crore vs Rs. 3,642.66 crore.

• PBT Rs. 1,640.60 crore vs Rs. 2,980.43 crore; PAT Rs. 1,277.33 crore vs Rs. 1,903.94 crore; EPS Rs. 37.69 vs Rs. 56.18.

• Recommended dividend 150%, including 50% interim, vs 220% in FY04; dividend including distribution tax totals Rs. 580.15 crore.

• Operating cash flow was Rs. 1,318 crore; capital expenditure was Rs. 1,322.63 crore and internal resources generated were Rs. 1,277.44 crore.

Outlook and guidance

• Planned capex of about Rs. 11,000 crore over 3–4 years for refinery clean-fuel projects, pipelines, marketing upgrades, and E&P and gas initiatives.

• Refinery debottlenecking and projects are intended to raise combined crude capacity from 13 MMT to 16.2 MMT; marketing pipeline projects are budgeted at Rs. 1,960 crore.

• Crude prices were expected to remain high in the short and medium term; margins face pressure unless crude prices ease or product realizations improve.

• LPG demand was forecast to grow at 8% CAGR, with rural demand growth projected at 17.5%; gas sourcing and distribution plans are being pursued.