Mangalore Refinery and Petrochemicals (500109) Q4 97/98 earnings summary

Executive summary

• Revenue rose to Rs 1,354.34 crore in FY1997-98 from Rs 1,159.47 crore; profit after tax was Rs 28.38 crore, down from Rs 90.52 crore.

• Refinery throughput increased to 3.953 MMT from 2.806 MMT; the 3-to-9 MMTPA expansion remained on schedule for completion by November 1999.

• APM dismantling began 1 April 1998, increasing exposure to crude and product prices, exchange rates and market-driven margins.

Financial highlights

• Turnover was Rs 1,354.34 crore versus Rs 1,159.47 crore in FY1996-97; profit before depreciation, interest and tax was Rs 529.78 crore versus Rs 554.16 crore.

• Profit after interest, before depreciation and tax, was Rs 221.56 crore versus Rs 161.47 crore; profit after tax was Rs 28.38 crore versus Rs 90.52 crore.

• P&L reported profit before tax of Rs 31.81 crore and profit after tax of Rs 28.38 crore; prior-year profit before tax and after tax were Rs 103.83 crore and Rs 90.52 crore.

• Income from operations was Rs 1,354.35 crore; other income was Rs 130.56 crore and interest and finance charges were Rs 392.69 crore.

Outlook and guidance

• FY1998-99 profitability was expected to remain under pressure from crude-product price differentials, high depreciation and interest costs until expansion completion.

• Expansion to 9 MMTPA was expected to complete by November 1999, with management anticipating higher turnover and profitability and stronger competitiveness after commissioning.

• Following APM changes, controlled-product prices shifted to adjusted import parity; decontrolled-product prices became market-driven, with refinery profitability dependent on international prices, tariffs, rupee-dollar parity and crude mix.