Higher refining margins boost Reliance Industries net profit

Strong gasoline cracks led by robust demand growth, lower energy cost and favourable crude differentials helped boost refining margins.

By: ENS Economic Bureau | Mumbai | Updated: July 25, 2015 4:04:47 am
Reliance Industries, Reliance Industries profit, RIL profit, economy news, business news RIL’s gross refining margins (GRM) for the first quarter stood at a six-year high of $ 10.4 per barrel as against $ 8.7 per barrel in the first quarter of last year.

Reliance Industries Ltd (RIL) has posted a 4.4 per cent rise in the consolidated net profit to Rs 6,222 crore in the first quarter ended June 2015 as against Rs 5,957 crore in the same period of last year, aided by the six-year high refining margins and strong petrochemicals earnings.

Beating market estimates, the company’s profits on a standalone basis rose by 11.8 per cent, the highest in seven-and-a-half years, to Rs 6,318 crore from Rs 5,649 crore in the year-ago period.

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RIL’s gross refining margins (GRM) for the first quarter stood at a six-year high of $ 10.4 per barrel as against $ 8.7 per barrel in the first quarter of last year. Strong gasoline cracks led by robust demand growth, lower energy cost and favourable crude differentials helped boost refining margins.

Turnover fell by 23 per cent to Rs 83,064 crore on a consolidated basis, it declined by 28.1 per cent to Rs 71,412 crore on a standalone basis. “The decline in revenue was led by the 43.5 per cent year-on-year decline in benchmark (Brent) oil price. Exports from RIL’s Indian operations were lower by 44.9 per cent at Rs 36,717 crore,” it said in a statement. RIL shares fell 1.9 per cent to close at Rs 1,025.05 on the BSE on Friday.

RIL Chairman Mukesh D Ambani, said: “Our financial performance reflects the benefits of integrated hydrocarbon chain activities in a benign oil price environment. The sharp increase in demand for transportation fuels helped us realize strong refining margins. Oil product demand globally is estimated to have grown at 1.6 MMBPD, resulting in high refinery runs across all regions. Our petrochemicals business recorded a strong quarterly performance supported by high operating rates and margin strength in the ethylene chain.”

According to Ambani, in the retail business, RIL has reached significant milestones over the past couple of years and continue the high growth trajectory for this business. “As we look forward, we are committed to accelerating the growth of operating EBITDA. We are leveraging the strength of our integrated value chains to deliver sustainable growth,” Ambani said.

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