Hindustan Petroleum Corporation (HINDPETRO) Q4 97/98 earnings summary

Executive summary

• FY1997-98 sales turnover reached a record ₹20,512.91 crore, up 13.4% YoY; net profit rose 14.53% to a record ₹701.16 crore.

• Visakh Refinery’s five-month shutdown after a fire reduced crude throughput; market sales still reached a record 16.00 million tonnes and market share was 20%.

• The year marked a major shift toward competition as phased dismantling of the Administered Pricing Mechanism began from April 1, 1998.

Financial highlights

• Turnover ₹20,512.91 crore vs ₹18,089.09 crore in FY1996-97; net profit ₹701.16 crore vs ₹612.22 crore.

• Profit before tax was ₹927.96 crore vs ₹941.70 crore; tax provision fell to ₹226.80 crore from ₹329.48 crore, supporting higher net profit.

• Internal resources generated were ₹971.45 crore vs ₹813.25 crore; contribution to the exchequer totaled ₹6,270.60 crore vs ₹6,134.35 crore.

• Proposed dividend rose to 50% from 40%; payout was ₹119.78 crore including dividend tax.

Outlook and guidance

• APM dismantling is scheduled in phases from FY1998-99 to FY2001-02; five products remain controlled during the transition, while other product prices are market-based.

• Visakh Refinery expansion from 4.5 to 7.5 MMTPA, costing ₹1,138.02 crore, was targeted for completion by April 1999 excluding FCCU; expected annual foreign-exchange savings: ₹256 crore.

• Diesel hydro-desulphurisation projects at both refineries, costing ₹1,552 crore, target mechanical completion by June 1999 to meet 0.25 wt% sulphur specifications.

• Business process re-engineering implementation focuses on customer orientation, productivity, technology upgrades, cost control and quality to strengthen competitiveness.