Privatisation-bound national refiner Bharat Petroleum Corporation on Friday said due to the pandemic-driven disruptions, it has scaled down capex plans for FY21 to Rs 8,000 crore from Rs 12,500 crore originally planned as projects are stuck due to unavailability of skilled manpower.
The company on Thursday reported a doubling of its net income at Rs 2,076 crore in the June quarter boosted by an inventory gain of Rs 565 crore and a marketing gain of Rs 1,003 crore.
It, however, earned 39 cents on turning every barrel of crude oil into fuel as compared to a gross refining margin (GRM) of $2.81 a barrel in the same period of the previous year.
The bottom line would have been higher but for the refinery loss Rs 438 crore due to the massive over 35 per cent drop in demand, N Vijayagopal, the executive director in charge of finance, told reporters in a post-earnings concall.
"We are forced to scale down the capex to Rs 8,000 crore from Rs 12,500 crore as we are unable to find the highly skilled manpower we need to complete two of our critical proejcts. The lower capex plan has got nothing to do with funds. In fact our leverage ratio is only 0.96x now down from 1.12x a year ago," Vijayagopal clarified.
He said the biggest project, which is the Kochi PDPP project, would have been ready for commissioning by September-October as planned but is stuck as "we need expert manpower from as many as 12 countries. Since there are no international flights we had no other option but to put the project on hold after the lockdown was imposed".
This is not an actual reduction in investment but shifting the investments to the next fiscal, he added.
"I have almost lost nearly half of the year as Q1 was a washout and the Q2 is still far from normal," he explained.
"We are not closing any project but only pushing the non-core ones to the next fiscal. So we will not be pushing all those projects which are under Rs 150 crore this fiscal," Vijayagopal said.
Similarly, he said there will not be any scaling down on retail expansion, adding that last year, the company opened close to 1,040 outlets and this year also it will launch as many retail outlets.
On his expectation of the GRM for the Q2, Vijayagopal said he does not see much improvement as cracks spreads are still way below the average but may improve from the third quarter.
In Q1, it had 39 cents in GRM down from USD 2.81 a year ago, but is still much better than the PSU peeers who had negative GRMs.
He said the company earned just 50 cents margins from petrol against USD 5 earlier while the same on diesel was even lower.
On the reported government decision banning national oil companies not to use Chinese flagged oil tankers for crude imports, Viajaygopal said this will not have any impact on imports as they haven't been suing many of them.
BPCL processed 5.14 million tonnes of crude in the first quarter, down from 7.45 million tonnes a year back. Revenue from operations during the said quarter was down to Rs 50,616.92 crore from Rs 81,296.23 crore.
Sales dipped 32.22 per cent -- petrol by 38.77 per cent, diesel by 34.62 per cent and ATF by 82.92 per cent. But cooking gas rose 10.83 per cent.