Reliance beats estimates, profit rises 41

8220;Fresh capacity additions during the year boosted Reliance8217;s overall production to nine million tonnes from six million tonnes in the previous year,8221; he said. Analysts had forecast the full year net profit to rise 30 per cent to around Rs 2,211 crore. Said an analyst at SG Securities, 8220;the results are above expectations. The revenue side is very strong in the fourth quarter8230; possibly driven by higher sales volumes. The profits are about eight per cent higher than my forecasts.quot;

Reacting to the results, Reliance Global Depositary Receipts GDR on overseas markets were up 9.59 per cent to 22 though most of the gains were posted before the announcement. In Mumbai, Reliance shares were fairly volatile over the day and came off a high of Rs 308.75 to close Rs 1.65 higher at Rs 298.50 as compared to Monday8217;s closing.

Ambani said with expanded production capacity of nearly 10 million tonnes per annum, the unique degree of integration and proven global competitiveness, Reliance will benefit from the return of a greater measure of stability to feedstock prices and the improving outlook for the global and regional petrochemicals industry. 8220;Our profits would have been higher by Rs 300 crore had there been no change in the basis of providing depreciation,8221; he said.

8220;Total exports zoomed by 164 per cent to Rs 1,811 crore in the year which is four times higher than our foreign exchange commitments,8221; Ambani said. Net worth and total assets of the company as on March 31, 2000 stood at Rs 13,983 crore and Rs 29,369 crore respectively. The RIL board had earlier recommended an interim dividend of 40 per cent, which entails a pay-out of Rs 427 crore for the company. This will be treated as the final dividend.

On buy-back of shares, Ambani said Reliance could go for a further share buyback after its present round of buy-back is completed. 8220;There is substantial room for more share buy-backs as we can utilise upto Rs 3,000 crore of our paid-up capital and reserves on share buy-back as per government rules,8221; Ambani said.

The firm had earlier disappointed the stock market by setting a maximum price of Rs 303 per share for a proposed buy-back of upto five per cent of its equity, when the market was expecting a price of over Rs 400. 8220;The Ambani family will continue with the creeping acquisition during its share buy-back,8221; Ambani said. In the last fiscal, the family had used the entire 5 per cent quota to increase its stake in the company to over 30 per cent.

On Reliance Petroleum, Ambani said the company has no plans now to dilute its stake in the refinery firm. 8220;We would retain our 63 per cent stake in Reliance Petroleum Ltd,8221; he said. RPL, Ambani said, would post a turnover of Rs 25,000 crore by the end of fiscal 2001 as it would start producing at its maximum capacity of 27 mmtpa.

On its foray into insurance, Ambani said the company is waiting for the insurance authority to be formed and it will apply for the license. 8220;We are keeping our options open and we are open to both general and life insurance,8221; Ambani said. The company is currently looking out for a joint venture partner, he added.

About the prospects of the telecom business, Ambani said the group has over 75,000 cellular customers from 36 cities and is in the process of setting up a 3,000 kilometer fibre optic digital highway in Gujarat for its basic telephone circle. 8220;We plan to invest Rs 250 crore in telecom business per annum to increase telephone penetration,8221; he said.

On IPCL disinvestment, Ambani said the group is waiting for the government8217;s next move in the disinvestment process. At present, only Reliance and the Chatterjee group, promoters of Haldia Petro, are in the race to buy the government-owned IPCL. The Reliance group expects the financial closure of its 500 mw Jamnagar and 477 mw Patalganga power projects in the current fiscal. On its investments in Lamp;T and BSES, Ambani said the group is a long-term investor in these companies and there is no change in its equity holding.

During the year, volume in the polyester business, in which RIL has a 47 per cent market share, increased by 11 per cent to 658,000 tonnes and it has acquired control over capacities of over 140,000 tonnes per annum in the last two years. In the fibre intermediates segment, its production was up by 45 per cent at 2.2 million tonnes MT while the total production of the domestic industry was up by 40 per cent to 2.5 MT.

In the polymers segment, RIL8217;s production volume rose by 2 per cent to 1.3 MT while total production of the industry was also up 27 per cent at 2.3 MT. In the cracker products segment, production of ethylene crossed 775,000 tonnes and that of propylene touched 382,000 tonnes. Oil and gas accounted for 2.4 per cent of RIL8217;s revenues during the year with oil production up nine per cent at 343,00 tonnes and gas production up 27 per cent at 2.38 MMCMD. 8220;We plan to invest over 200 crore in oil and gas exploration,8221; Ambani added.