Oil refiner blames weaker lira for its losses

Bloomberg

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Tüpraş had a net loss of 37.4 million liras ($24 million) compared with a profit of 38 million liras in the first quarter of last year, the Kocaeli-based company said in an e-mailed statement. Tüpraş had been expected to post a loss of 46 million liras, according to the median estimate of six analysts surveyed by Bloomberg.

The lira declined 7.5 percent against the dollar in the quarter and fell as much as 15 percent on March 7. That drove up the cost of buying crude and financing Tüpraş’s foreign-currency-denominated debt. Maintenance also meant the refiner worked at lower capacity.

"Capacity utilization was very low," said Ebru Eroğlu, analyst at TEB Investment in Istanbul. "They went for maintenance in the first quarter and that only increased foreign currency losses."

Tüpraş said its refining margin, or the profit from processing crude oil into fuels, was $9.32 a barrel in the first quarter, up from $7.83 a year earlier. Koç Holding, Turkey’s biggest industrial group, owns Tüpraş.