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Chennai Petroleum writes down inventory of Rs 1,456 cr
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SME Times News Bureau | 05 Jun, 2020
Oil refinery Chennai Petroleum Corporation Ltd (CPCL) on Friday said
that the Covid-19 lockdown had led to crash in crude prices in the
international markets and forced it to write down an inventory of Rs
1,456 crore.
In a regulatory filing, CPCL, which is part of
Indian Oil Corporation group, said the lower demand for crude oil and
petroleum products had impacted the prices and refining margins of the
company.
"Due to the above reasons, our finished goods,
intermediates and raw material inventory have been valued at net
realizable value/replacement costs as on March 31. This has resulted in
significant inventory write down of Rs 1,456 crore," CPCL said.
According
to CPCL, it has scaled down its operations at around 60 per cent and
the demand for the products is expected to improve over the next few
weeks/months as more and more sectors of the economy are opened up.
"The
lower demand and resultant inventory build-up has led to increase in
short-term borrowings, which is expected to get normalised based on
turnaround in demand situation and stabilisation of international prices
of crude and products," CPCL said.
The company does not expect
any significant Covid-19 impact on the continuity of operations on a
long-term basis though there may be lower revenues and refinery
throughput in the near term, CPCL said.
On Friday the CPCL stock opened at Rs 58.90 and closed at Rs 62.95 on the BSE.
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