Reliance Industries ltd on Monday posted a better-than-expected 1.7 per cent rise in second quarter net profit, helped by strong growth in refining margins which neutralised slump in oil and gas earnings.
Net profit in July-September at Rs 5,972 crore, or Rs 20.3 per share, was 1.7 per cent higher than Rs 5,873 crore, or Rs 20 a share earning in the same period last fiscal, the company said in a statement here.
RIl, the operator of world’s biggest oil-refinery complex, earned $8.3 for turning every barrel of crude oil into fuel in Q2 as compared to $7.7 a barrel gross refining margin a year ago. The GRM, however, was lower than $8.7 per barrel in the previous April-June quarter.
Turnover dropped 4.3 per cent to Rs 113,396 crore due to lower crude oil prices and volumes mainly in the refining and oil and gas business. Exports too dipped 14.7 per cent to Rs 66,065 crore ($10.7 billion) as against Rs 77,428 crore in the corresponding period of the previous year.
Pre-tax profit from refinery business jumped 18.5 per cent to Rs 3,844 crore even though revenue dropped 5.9 per cent to Rs 103,590 crore on slump in international oil prices and lower processing.
While petrochemical earnings were almost unchanged at Rs 2,361 crore, pre-tax profit from oil and gas business dropped 14.4 per cent to Rs 818 crore due to drop in production.
RIl Chairman and Managing Director Mukesh D Ambani said refining and petrochemical businesses delivered robust results, outperforming regional industry benchmarks.
“Renewed optimism in the domestic economy augurs well for business and consumer confidence particularly against the backdrop of continuing concerns on global economic growth.
“We expect to create significant value for our stakeholders over the next 12-18 months as we complete our large investment programme across energy and consumer businesses. These projects will propel the next phase of growth for India and Reliance,” he said. RIl is investing close to $16 billion in expandingpetrochemical production capacity and lower feed and fuel costs to boost profits.
It is investing $4.6 billion in an integrated gasification combined cycle (IGCC) project that will convert captive petrocoke to synthetic gas (syngas) which can be used to generate power, steam and hydrogen, which currently are being produced using expensive imported lNG.