Chennai Petroleum: Refining gains
Chennai Petroleum Corporation (CPCL) share price jumped over 8% in the morning session on October 22 after the company declared its September quarter results.
CPCL, a subsidiary of Indian Oil Corporation, reported a profit of Rs 290.58 crore during the quarter ended September 30, 2020 as compared to a loss of Rs 212.7 crore, a year ago.
Average Gross Refining Margin (GRM) during April to September was $9.70 per bbl as compared to $2.03 per bbl. GRM is higher mainly due to favourable increase in prices of crude and products.
Revenue of the firm was down to Rs 9,732.90 crore from Rs 12,191.97 crore as demand for fuel products was lower during the current half year due to COVID related lockdown, resulting in lower crude throughput.
EBITDA stands at Rs 657.26 crore in September 2020 up 764.44% from Rs 98.92 crore in September 2019. EPS has increased to Rs 19.51 in September 2020 from Rs 14.30 in September 2019.
Meanwhile, CPCL is planning to invest about Rs 1,850 crore in BS VI auto fuels to cater the demand in the southern parts of the country.
In November 2019, the company completed the diesel hydro-treating (DHDT) BS VI revamp project (from 1.8 to 2.4 MMTPA), a new FCC gasoline de-sulphurisation unit of 0.6 MMTPA capacity. Pre-commissioning activities have already commenced. Mechanical completion of the unit is expected by second quarter of 2020 21. Commissioning is expected by Q3 of 2020 21. new sulphur recovery block is expected to be completed by the fourth quarter of 2020-21. The estimated project cost of the BS-VI auto fuel quality upgrade project is Rs 1,858 crore.
CPCL has undertaken a project to use natural gas as an internal fuel, replacing existing materials like liquid fuel and naphtha, at an estimated cost of Rs 421 crore. Apart from improving proifitability, implementation of this project will also improve the environment condition. CPCL has successfully commissioned RLNG in three GTs (GT 2, 3 and 4), and two boilers (Boiler 1 and 2) during 2019-20. The remaining equipment will be converted into RLNG in the year 2021.
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