Reliance Industries today posted its highest quarterly profit in more than two years as robust petrochemical margins and a surge in export earnings on a drop in rupee value offset weakness in the natural gas business.
Net profit rose 0.8 per cent to Rs 5,631 crore, or Rs 17.4 per share, in the January-March period from Rs 5,589 crore, or Rs 17.3 a share, in the same period a year ago.
Earnings from oil refining climbed 12.3 per cent, while those from the petrochemical segment were up 10.6 per cent, offsetting a 17.8 per cent dip in the oil and gas business, the company said in a statement.
RIL, which operates the world’s biggest refining complex at Jamnagar in Gujarat, earned USD 9.3 on turning every barrel of crude oil into fuel in the quarter, compared with a gross refining margin of USD 10.1 a barrel a year earlier and USD 7.60 a barrel in the preceding three months.
Earnings got a boost as the rupee declined to Rs 61.8 against the US dollar in Q4 from Rs 54.2 a year earlier.
Sales rose 13 per cent to Rs 97,807 crore in Q4.
For the full financial year, the company reported a record net profit of Rs 21,984 crore, the highest by any private sector firm in the country. Net profit was 4.7 per cent higher than Rs 21,003 crore in 2012-13.
Turnover, too, was at a record high of Rs 401,302 crore, up 8.1 per cent from Rs 371,119 crore previously.
RIL Chairman and Managing Director Mukesh D Ambani said, “FY 2013-14 was a satisfying year for RIL. Refining business delivered the highest ever profits with a sharp recovery in GRMs towards the end of the year. Petrochemical earnings grew sharply with margin expansion across polymers and downstream polyester products.
“While we continue to face technical challenges in growing domestic upstream production, the US shale gas business grew significantly during the year and has become a material contributor to our earnings.”
RIL’s retail business has turned around and is now India’s largest retail chain, he said, adding the company has accelerated efforts to roll out state-of-the-art 4G services across the country.
RIL’s debt soared to Rs 89,968 crore at the end of Q4, up from Rs 72,427 crore at the beginning of the financial year. At the end of March, it had a cash pile of Rs 88,190 crore.
RIL said profit from the oil and gas business dipped 17.8 per cent to Rs 378 crore in the January-March quarter due to a fall in KG-D6 production that was attributed to “geological complexity and natural decline in the fields and higher than envisaged water ingress.”
Its shale gas business in the US continued to grow in 2013-14, with revenue jumping 45 per cent to USD 893.3 million and earnings before interest, taxes, depreciation and amortisation, or EBITDA, rising 37 per cent to USD 659.4 million.
Refinery business earnings before interest and taxes were up 12.3 per cent to Rs 3,954 crore in Q4, while in the petrochem business, it was up 10.6 per cent at Rs 2,096 crore.
Exports of products from its twin refineries at Jamnagar increased to USD 41.1 billion during the year from USD 39.3 billion in the previous year. Shipments of refined products sent overseas rose to 43.8 million tons from 41.2 million tons earlier, the statement said.
Reliance Retail, which the company claimed is now the biggest retail firm in the country, saw revenue grow 34 per cent to Rs 14,496 crore and reported a cash profit of Rs 363 crore. The retail arm operates 1,691 stores across 146 cities.
Reliance Q4 sales rise, refining margin narrows
Reuters Indian energy company Reliance Industries Ltd posted nearly flat fourth-quarter profits, in line with estimates, as a slimmer margin in its oil refining business offset higher revenue.
Reliance, which operates the world’s biggest refining complex in western India, reported net profit of 56.31 billion rupees for the quarter to end-March, compared with analysts’ expectations of 56.62 billion rupees.
Its average gross refining margin dropped to $9.30 per barrel from $10.10 a year earlier, although it was up from the preceding quarter’s $7.60. Net sales rose 13 percent.
Investors have focussed, however, on the oil and gas production business at Reliance, India’s second most valuable company which is controlled by its richest man, Mukesh Ambani.
The upstream business, which is small relative to refining, has several concessions including the Krishna Godavari D6 block off India’s east cost.
Gas output from the block has fallen sharply since 2010. The company says the decline is due to the geological complexity of the block, while the government says contractors have failed to drill the promised number of wells.
The block, in which BP Plc has a 30 percent stake and Canada’s Niko Resources 10 percent, currently produces about 13 million cubic metres of gas per day, a government source said last month.
Reliance has said further investment at the field to reverse falling output would require a rise in domestic gas prices.
A formula that would have nearly doubled prices from April 1 was approved by the cabinet, but the Election Commission last month asked the government to defer the increase until the end of the five-week general election in the middle of May.
India’s main opposition Bharatiya Janata Party (BJP), which surveys show is on course to become the largest parliamentary party, has said it will review the gas pricing formula if it is elected.
Reliance also has interests in areas including retail and telecommunications. Its retail business, which started at end-2006, posted its first ever annual profits before depreciation, interest and tax at 3.63 billion rupees.
“The retail business has turned around and is now India’s largest retail chain,” Chairman Mukesh Ambani said.
The group expects a compounded annual growth rate of 25 to 30 percent for its retail business in the next two to three years, TV channel ET Now cited the company as saying.
Reliance has spent billions of dollars on a 4G mobile telecoms venture, which has yet to be launched. It said it had accelerated efforts to roll out 4G services.
The company aims to capture a big share of the fledgling but growing wireless data market by offering low-cost services. It recently added airwaves that would help it offer bread-and-butter voice telephony along with premium high-speed Internet services.