Mangalore Refinery and Petrochemicals (500109) Q4 02/03 earnings summary

Executive summary

• FY03 revenue rose 51% YoY to Rs. 8,058.77 crore; net loss narrowed to Rs. 240.98 crore from Rs. 286.46 crore, with high interest, depreciation and weak refining margins weighing on results.

• ONGC’s equity infusion and debt restructuring shifted ownership control, reduced leverage and supported the refinancing of outstanding debt.

Financial highlights

• Turnover was Rs. 8,058.77 crore vs Rs. 5,353.91 crore; profit before depreciation, interest and tax was Rs. 402.61 crore vs Rs. 287.83 crore.

• Interest and finance charges fell to Rs. 567.07 crore from Rs. 672.29 crore; depreciation and amortisation rose to Rs. 404.85 crore from Rs. 394.45 crore.

• Net loss was Rs. 240.98 crore vs Rs. 286.46 crore; the FY03 result included an Rs. 83.47 crore provision for earlier-year claims and a deferred tax credit.

• Exports reached Rs. 1,913 crore, up 622% YoY from Rs. 265 crore; export realisations improved with integrated planning and product quality.

Outlook and guidance

• FY04 operations were planned at rated capacity of 9.69 MMTPA; higher throughput was expected to lower unit costs.

• Sweet crude share was expected to rise from 10% or less to 30% or more, supporting higher light and middle distillate yields and lower desulphurisation energy costs.

• A Rs. 720 crore capital budget was approved, including Rs. 600 crore for Bharat II/Euro III fuel upgrades, Rs. 75 crore for mixed xylenes and Rs. 45 crore for energy savings and other schemes.

• Direct HSD marketing had started; retail MS and HSD sales were planned under ONGC’s licence and brand, while the Mangalore-Hassan-Bangalore pipeline was expected to reduce inland transport costs.