Reliance profit soars 25 to Rs 1,653 crore

MUMBAI, April 27: Reliance Industries Ltd RIL, the largest private sector enterprise in the country, has successfully weathered the vagari...

MUMBAI, April 27: Reliance Industries Ltd RIL, the largest private sector enterprise in the country, has successfully weathered the vagaries of the general industrial slowdown, lower import duties and dumping by notching up a 54 per cent rise in sales turnover and a 25 per cent increase in net profit for the year ended March 1998. The board of directors has announced a dividend of 35 per cent on higher capital after the bonus issue 75 per cent adjusted for bonus as against 65 per cent for the previous year.

While the sales turnover of the company soared past the Rs 10,000 crore mark to Rs 13,740 crore 3.479 billion from Rs 9,020 crore in the previous year, the company made an operating profit of Rs 2,887 crore as against Rs 1,948 crore. After paying a higher Rs 504 crore Rs 170 crore as interest charges, the gross profit has amounted to Rs 2,383 crore Rs 1,778 crore. As depreciation has claimed Rs 667 crore Rs 410 crore and taxation Rs 63 crore, the net profit has gone up to Rs 1,653 crore 418 million from Rs 1,323 crore previously.

The proposed dividend will involve a payout of Rs 327 crore Rs 299 crore and the tax on dividend Rs 64 crore. The company has transferred Rs 753 crore to general reserves and Rs 1,048 crore has been carried forward.The financial performance of the company was in line with market expectations. Marketmen were expecting Rs 1,500-1,600 crore net profit for the year. The Reliance scrip moved up by Rs 8.20 to Rs 197.30 on the Bombay Stock Exchange.

According to RIL managing director Anil Ambani, there was a sales volume growth of 91 per cent during the year as a result of the successful commissioning of all new plants at Hazira petrochemical complex. 8220;Global prices were lower which also led to lower domestic prices. Lower prices accelerated the domestic demand and nearly entire incremental volume was absorbed in the domestic market,8221; he said.

Referring to the 54 per cent rise in sales, Ambani said production volume increased nearly three times from 1.8 milliontonnes to 5.2 million tonnes. On the rise in interest charges to Rs 504 crore, he said interest expenses increased due to higher borrowings and lower capitalisation of interest for projects as a result of commissioning of new plants at the Hazira complex.Ambani attributed the 25 per cent rise in net profit to the volume growth, backward integration through commissioning of multifeed cracker, lower costs, improved productivity partially offset by lower international prices, higher interest and depreciation charges. Total exports including deemed exports during the year shot up by more than four times to Rs 366 crore from Rs 107 crore.

The earning per share EPS of the company works out to Rs 17.6. The equity capital of the company has gone up to Rs 934 crore from Rs 460 crore after the 1:1 bonus issue in 1997. The total assets created by the company also amounted to Rs 24,388 crore. 8220;The company had set a target of achieving 20 per cent return on shareholders funds over the next five years,8221; hesaid.8220;The company has reconciled the accounts with US GAAP as well as with International Accounting Standard IAS,8221; Ambani said. This is being done as a precursor to the listing of the company8217;s shares on the New York Stock Exchange. On the takeover scenario, Amabni said 8220;there are no plans for any takeovers in India, though a number of companies have offered their plants for takeover or on lease and we have an open mind on the offers.8221;

RIL JV plans hike in oil capacity

MUMBAI: The joint venture company floated by Reliance Industries, Oil amp; Natural Gas Corporation ONGC and the US-based multinational Enron Oil amp; Gas has submitted a proposal to the Union petroleum ministry for a fourfold increase in gas production from five million tonne per day to 22 million tpd.

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Reliance Industries managing director Anil Ambani said government clearances were expected to increase production of oil and gas from the Panna, Mukta and Tapti fields.

The joint venture project with ONGC 40 per cent,Enron 30 per cent and RIL 30 per cent is expected to invest US dollar three billion over the next 10 years to enable the venture to step production mainly of gas to 22 million tonnes of cubic feet.