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MRPL digestion of OMPL may still cause burps
Apr 25:
MRPL faces a challenging future even as it plans to merge its aromatic subsidiary, OMPL, with itself.
8OMPL has been reporting sizeable book losses post-commissioning of its plant due to subdued crack spreads and sub-optimal utilisation of the plant in the past, though the performance has improved since H2FY2017.
8MRPL has sizeable capex outlined in the medium to long term to achieve Bharat Stage (BS)-VI compliance, enhanced refinery capacity to 25 MMTPA and to set up a desalination project to safeguard its operations against water shortage. The large-scale projects would entail execution risks, while the timelines and funding mix would remain a concern.
Among the vulnerabilities are:
8Fluctuations in profits due to the import duty differential on the domestic sales, commodity price cycles and forex fluctuations (INR-USD rates)
8Sizeable debt repayments in FY2018 and FY2019 may lead to refinancing requirements
8Financial performance of OMPL remains depressed as reflected in sizeable book losses mainly due to subdued crack spreads and sub-optimal utilisation of the plant in the past. However, improvement in performance of OMPL has been seen of late as synergy benefits of the merger of OMPL with MRPL remain quite strong in the long run
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8OMPL has been reporting sizeable book losses post-commissioning of its plant due to subdued crack spreads and sub-optimal utilisation of the plant in the past, though the performance has improved since H2FY2017.
8MRPL has sizeable capex outlined in the medium to long term to achieve Bharat Stage (BS)-VI compliance, enhanced refinery capacity to 25 MMTPA and to set up a desalination project to safeguard its operations against water shortage. The large-scale projects would entail execution risks, while the timelines and funding mix would remain a concern.
Among the vulnerabilities are:
8Fluctuations in profits due to the import duty differential on the domestic sales, commodity price cycles and forex fluctuations (INR-USD rates)
8Sizeable debt repayments in FY2018 and FY2019 may lead to refinancing requirements
8Financial performance of OMPL remains depressed as reflected in sizeable book losses mainly due to subdued crack spreads and sub-optimal utilisation of the plant in the past. However, improvement in performance of OMPL has been seen of late as synergy benefits of the merger of OMPL with MRPL remain quite strong in the long run
Click on Reports for more
