MRPL has registered a net sale of down 5% at Rs 7640.37 cr from Rs 8052.17 cr and net profit at Rs 331.74 cr from Rs 9.29 cr. Other income accounts at Rs 38.6 cr Vs Rs 18.17 cr.
R Rajamani, MD, MRPL expects crude prices to cross $100. Regarding their projects, he informed that their aromatics project is on schedule and is likely to come up by end of 2010.
Excerpts from CNBC-TV18 exclusive interview with R Rajamani, MD, MRPL:
Q: Sales went down 5%, what is the outlook that you can offer for the next half of this financial year given that crude prices are at record highs and there is talk about refining margins seeing more traction?
A: This H1 we have made net profit of Rs 700 crore. We expect this to be sustained to the same level or maybe little bit lower. PAT would be in the range of about Rs 1,200 crore. Our refining margins have been very good. The first quarter was the best in the range of about USD 9/bbl. It has slightly come down. For the half year it was USD 7.3/bbl. We expect this to be in the same range of USD 6/bbl-USD7/bbl. So the going is good, it’s very positive outlook for us at MRPL.
Q: If you can give us an update on what kind of GRMs you had in second quarter and what is the kind of bump up that we can expect from you going ahead?
A: In last year quarter, Q2 it was little less than USD 2/bbl; now we have made USD 6.3/bbl- three times and half year it is about USD 7.3/bbl. So that’s what I said - we expect this to be maintained in the range of between USD 6-7 throughout the year. The crude prices have gone upto USD 96/bbl yesterday, so product prices also are going up.
What is happening is the strengthening of the rupee is also giving us a little bit of comfort in the sense that we pay less for the crude; we get a good margin because of that.
Q: Going ahead what levels are you anticipating crude to achieve because there is talk of it crossing USD 100 within the medium-term, if not in the short-term itself and then in that case, what kind of GRMs would you target?
A: I expect crude prices to cross USD 100. Product prices have crossed USD 100 in any case because product prices the cracks are in the range of about USD 15-20. So already product prices have gone beyond USD 100 and crude futures also already crossed USD 100.
We expect the cracks to remain nearly the same because the growth has been very good; internationally also GRMs have been very good, being sustained. So at least for this year, we expect between USD 6-7.
Q: Could you highlight the project plans that you have on board as of now for your refinery expansion and up gradation? The project has been delayed to April 2011- ten months delay is imposed, once this project comes on board what kind of financial picture would your company reflect?
A: There are two projects we are executing in parallel. One is the expansion up gradation and the second one is the aromatics project, which is being put up by MPL (Mangalore Petrochemicals Limited). In the upgradation project, there was some delay because the licenses response has not been so good, they are too busy to respond to us and the clarification took some time to come but we have placed some orders on licenses and on package and it should be with us in the next six months time and after that we will have EPC (Engineering, Procurement and Construction) contract in line.
As of now there has been a delay. We are trying to reduce the delay and compensate as much as possible, which will happen now after we place an order on EPC contract, expected to be somewhere in December 2010.
Most importantly, there are many units which are being installed as a part of the upgradation project. We hope to commission the crude unit; the first parent unit on schedule, without any delay and that can take the products to the existing refinery. So partly, we will be on stream and even on schedule. Some of the units may get slightly delayed, which we will try to compensate. On the other hand, the aromatics project put up by MPL is on schedule and is likely to come up by end of 2010.
R Rajamani, MD, MRPL expects crude prices to cross $100. Regarding their projects, he informed that their aromatics project is on schedule and is likely to come up by end of 2010.
Excerpts from CNBC-TV18 exclusive interview with R Rajamani, MD, MRPL:
Q: Sales went down 5%, what is the outlook that you can offer for the next half of this financial year given that crude prices are at record highs and there is talk about refining margins seeing more traction?
A: This H1 we have made net profit of Rs 700 crore. We expect this to be sustained to the same level or maybe little bit lower. PAT would be in the range of about Rs 1,200 crore. Our refining margins have been very good. The first quarter was the best in the range of about USD 9/bbl. It has slightly come down. For the half year it was USD 7.3/bbl. We expect this to be in the same range of USD 6/bbl-USD7/bbl. So the going is good, it’s very positive outlook for us at MRPL.
Q: If you can give us an update on what kind of GRMs you had in second quarter and what is the kind of bump up that we can expect from you going ahead?
A: In last year quarter, Q2 it was little less than USD 2/bbl; now we have made USD 6.3/bbl- three times and half year it is about USD 7.3/bbl. So that’s what I said - we expect this to be maintained in the range of between USD 6-7 throughout the year. The crude prices have gone upto USD 96/bbl yesterday, so product prices also are going up.
What is happening is the strengthening of the rupee is also giving us a little bit of comfort in the sense that we pay less for the crude; we get a good margin because of that.
Q: Going ahead what levels are you anticipating crude to achieve because there is talk of it crossing USD 100 within the medium-term, if not in the short-term itself and then in that case, what kind of GRMs would you target?
A: I expect crude prices to cross USD 100. Product prices have crossed USD 100 in any case because product prices the cracks are in the range of about USD 15-20. So already product prices have gone beyond USD 100 and crude futures also already crossed USD 100.
We expect the cracks to remain nearly the same because the growth has been very good; internationally also GRMs have been very good, being sustained. So at least for this year, we expect between USD 6-7.
Q: Could you highlight the project plans that you have on board as of now for your refinery expansion and up gradation? The project has been delayed to April 2011- ten months delay is imposed, once this project comes on board what kind of financial picture would your company reflect?
A: There are two projects we are executing in parallel. One is the expansion up gradation and the second one is the aromatics project, which is being put up by MPL (Mangalore Petrochemicals Limited). In the upgradation project, there was some delay because the licenses response has not been so good, they are too busy to respond to us and the clarification took some time to come but we have placed some orders on licenses and on package and it should be with us in the next six months time and after that we will have EPC (Engineering, Procurement and Construction) contract in line.
As of now there has been a delay. We are trying to reduce the delay and compensate as much as possible, which will happen now after we place an order on EPC contract, expected to be somewhere in December 2010.
Most importantly, there are many units which are being installed as a part of the upgradation project. We hope to commission the crude unit; the first parent unit on schedule, without any delay and that can take the products to the existing refinery. So partly, we will be on stream and even on schedule. Some of the units may get slightly delayed, which we will try to compensate. On the other hand, the aromatics project put up by MPL is on schedule and is likely to come up by end of 2010.
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