This is an archive article published on October 14, 2014

Reliance Industries Q2 profit up 1.7 pc on higher refining margins

RIL shares closed 0.26 per cent lower at Rs 957.85 on the BSE on Monday.

3 min readMumbaiOct 14, 2014 08:29 AM IST First published on: Oct 14, 2014 at 01:56 AM IST

RIL’s gross refining margins (GRM) for the quarter stood at $8.3 per barrel as against $7.7/bbl in the corresponding period of the previous year.

Aided by higher refining margins, Reliance Industries Ltd (RIL), India’s third largest company in terms of market value, on Monday posted a better-than-expected 1.7 per cent increase in September quarter profit at Rs 5,972 crore as against Rs 5,873 crore in September 2013.

However, turnover of the company declined by 4.3 per cent to Rs 1,13,396 crore in the September quarter from Rs 1,18,439 crore in the same period of last year. RIL said lower crude prices and volumes mainly in the refining and oil & gas business accounted for decrease in revenue.

Further, exports from India were lower by 14.7 per cent at Rs 66,065 crore ($10.7 billion) as against Rs 77,428 crore in the corresponding period of the previous year.

RIL chairman and MD Mukesh Ambani said: “The refining and petrochemical businesses, once again, 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.”

RIL shares closed 0.26 per cent lower at Rs 957.85 on the BSE on Monday. “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,” Ambani said.

RIL’s gross refining margins (GRM) for the quarter stood at $8.3 per barrel as against $7.7/bbl in the corresponding period of the previous year. Its premium over regional benchmark widened to $3.5/bbl, as compared to $2.5/bbl in the corresponding period of the previous year, primarily aided by wider crude differentials and sourcing advantage. The GRM, however, was lower than $8.7 per barrel in the previous April-June quarter.

Despite persistent inflation and slow consumption growth, second quarter revenue for Reliance Retail grew by 20 per cent year-on-year to Rs 4,167 crore, RIL said. “All format sectors grew through store additions as well as consistent like for like growth ranging up to 21 per cent. The business recorded a profit before depreciation, interest and tax (PBDIT) of Rs 186 crore, an increase of 96 per cent,” RIL said. The company is investing around $16 billion in expanding petrochemical production capacity and lower feed and fuel costs to boost profits.