With petroleum product prices skyrocketing the ailing A.V. Birla group company, Mangalore Refinery and Petrochemicals Ltd (MRPL), has been able to report a 32% growth in topline in 2QFY01. The company has also been able to improve its sale volumes.
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The sale volumes are expected to rise with the commissioning of the 6 MMTPA capacity expansion. Currently, trial runs are in progress to stabilise the expanded operations. Further, the company has completed phase-I of debottlenecking and phase-II is underway. This is expected to add another 3 MMTPA of refining capacity. Going into FY02 the company's refining capacity is anticipated to be 12 MMTPA.
Although QoQ the margins have declined, which indicates the oil price rally over the past six months, YoY the OPM has improved by 80 basis points. Going into the winter months the refining margins may improve with petroleum product prices firming up more than crude prices.
The company has been able to reduce its losses due to improvement in operating margins and reduction in interest burden. MRPL has been able to incur lower interest charges by accessing cheaper foreign debt. However, for 1HFY01 the company has reported a net loss of Rs 1505 m.
MRPL has definite plans of entering the lucrative vehicle fuel marketing segment. It has already submitted a proposal to the Government for the same. It had appointed Andersen Consulting to prepare a business plan for its foray into marketing. The company plans to rope in a strategic partner, as it will require the funds to roll out an independent distribution channel.
If the company's networth is adjusted for the accumulated losses (Rs 3230 m) the company has a book value of Rs 8.1. This not taking into consideration the loss the company will report in the current year, which will further affect the book value. The company currently trades at Rs 8.6.
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