With notable performance in refinery and petrochemicals businesses Reliance Industries on Friday posted highest-ever quarterly net profit of Rs6,720 crore for three months ending September 30. Net profit for July-September quarter of the 2015-16 fiscal also rose 12.5 per cent to Rs6,720 crore, or Rs22.8 per share, from Rs5,972 crore, or Rs20.3 a share, in the same period of last fiscal, the company said in a statement.
However, RIl Chairman Mukesh D Ambani said, “We achieved record levels of EBITDA and profits for the quarter, underscoring our ability to optimally utilise our assets across the value chain to leverage favourable market conditions.”
“Refining business performance was notable as it benefited from a combination of high utilisation levels, advantageous crude market opportunities and strong global fuels demand,” he said, adding that petrochemicals performance reflects strong volume growth, product mix improvement and lower energy costs.
Sales, however, fell 33.8 per cent to Rs75,117 crore on benchmark crude oil prices halving. The operator of world’s biggest oil-refinery complex earned $9 on turning every barrel of crude oil into fuel during second quarter of the current fiscal as compared to a gross refining margin of $3.7 per barrel in the year ago period.
The GRMs in September quarter were at 7-year high and the company’s Jamnagar refineries in Gujarat earn $4.3 per barrel more than Singapore average.
The net profit included gains of Rs252 crore from sale of investment in US shale gas pipeline venture, EFS Midstream llC. Net profit after excluding exceptional items was up 4 per cent to Rs6,468 crore.
Pre-tax profit from petrochemical business was up 7.2 per cent while that from the oil and gas business declined over 70 per cent on fall in KG-D6 output.
The company also announced start of sale of mobile handsets ahead of its much talked about launch of 4G telephony and broadband data services in December. “Reliance Retail achieved a milestone of Rs5,000-crore quarterly turnover mark for the first time, reflecting continuing growth momentum in physical retailing,” he said.
“In Digital Services, we have substantially completed the network roll-out across the country and initiated the process of beta testing of our network and platforms,” he added.
RIl said exceptional items of Rs252 crore represent the net impact of the gain on sale of investment (net of taxes) in EFS Midstream llC of Rs2,911 crore and provision for impairment (net of tax), in shale gas assets held by Reliance Holding USA Inc of Rs2,659 crore.
While pre-tax profit from refinery business jumped 42.1 per cent to Rs5,461 crore, earnings from petrochemical business soared 7.2 per cent to Rs2,531 crore. EBIT from domestic oil and gas production business however dropped 83.1 per cent to Rs56 crore on “lower oil/ condensate prices and decline in gas production from KG-D6 block”, said RIl statement.
Other income fell to Rs1,596 crore in second quarter as against Rs2,009 crore in same period of the previous fiscal, primarily on account of lower accruals on investments.
Interest cost was marginally lower at Rs972 crore as against Rs997 crore in July-September 2014-15. RIl’s outstanding debt was higher at Rs172,765 crore as on September 30, 2015 when compared to Rs170,814 crore as on June 30.
Its cash balance was also lower at Rs85,720 crore, compared with Rs87,391 crore. RIl said exports were lower by 35.5 per cent at Rs42,636 crore due to lower product prices in line with lower crude oil prices.
Brent oil price averaged at $50.3 per barrel in the second quarter of the current fiscal, compared to $101.8 in the year-ago period. “Strong operating performance from refining and petrochemicals business coupled with favourable exchange rate movement was partially offset by lower contribution from oil and gas business,” said the RIl statement.