Firm's net profit jumps 1.5% in July-September, despite 19% drop in gross refining margins
Reliance Industries Ltd (RIL) on Monday beat the Street, posting net profit of Rs 5,490 crore in the July-September quarter, 1.5 per cent higher than that in the second quarter of 2012-13. This was despite a 19 per cent drop in its gross refining margins and higher than analysts’ estimates of Rs 5,380-5,410 crore.
The company became the first company in the country to achieve quarterly turnover or sales of more than Rs 1 lakh crore in a quarter. Its turnover during the quarter stood at Rs 1,06,523 crore, against Rs 93,266 crore in the previous quarter.
“RIL’s performance in the first half of the year reflects the resilience of our business model in a period of volatility and uncertainty. Our diversified and integrated petrochemicals business captured margins across segments — delivering near-record profit levels, even as the domestic economy slowed,” said RIL Chairman Mukesh Ambani.
The company’s gross refining margins (GRM) — earnings from processing every barrel of crude oil — stood at $7.7 a barrel, compared with $9.5 a barrel in the same quarter a year ago. Reuters’ Singapore benchmark GRMs were down to a 12-quarter low of $5.4 a barrel during the quarter. However, revenues for its refining and marketing segment rose 16.2 per cent to Rs 97,456 crore.
“Optimal utilisation of best-in-class refinery assets and inherent flexibility in sourcing, product delivery contributed to healthy operating profits from our refining business,” added Ambani.
“RIL’s numbers are led by growth in core business and other income has not contributed much to the overall profitability,” said Jagannadham Thunuguntla, equity head, strategist & head of research, SMC Capitals.
The company’s revenue from petrochemical segment rose 12.8 per cent to Rs 24,892 crore, from Rs 22,058 crore in the September quarter last year. It said its petrochemicals business performance was boosted by higher volumes, stable demand, improved deltas for key polymers & fibre intermediates, and favourable exchange rate movement. “Though polyester margins were weak, RIL benefitted due to integrated chain economics,” the company said in a press statement.
“A petrochemicals margin of over 10 per cent is excellent and even refining margins came beyond expectations,” said Destimoney Securities President Sudip Bandyopadhyay.
On the retail business front, RIL posted 31 per cent sales growth during the quarter, compared with the same period a year ago.
“The company’s retail business continues to break new ground, growing 41 per cent in the first half of 2013-14. Reliance’s ongoing counter-cyclical investments will strengthen our competitive position in each business segment,” Ambani added.
RIL said, during the quarter, the retail business crossed a significant milestone of operating 10 million square feet of retail space, with an addition of 58 stores across all formats. The business now operates over 1,550 stores across 136 Indian cities. Revenue from its shale gas business stood at Rs 1,208.5 crore - year-on-year growth of 33 per cent.
"There continues to be focus on operational, cost and efficiency improvements," RIL said.
The company's average combined daily production for its three joint ventures stood at 875 million standard cubic feet per day during the quarter. "As at the end of the second quarter of 2013-14, the cumulative number of producing wells stood at 550, compared with 309 at the end of the second quarter of 2012-13 and 494 wells at the end of the first quarter of this financial year," RIL added.
Ahead of the results, the RIL scrip gained 0.84 per cent from its previous close to Rs 870.25 on BSE. The BSE Oil & Gas Index gained 0.35 per cent to close at 8,554.95. The results were declared after the end of Monday's trading session.
Reliance Industries Ltd (RIL) on Monday beat the Street, posting net profit of Rs 5,490 crore in the July-September quarter, 1.5 per cent higher than that in the second quarter of 2012-13. This was despite a 19 per cent drop in its gross refining margins and higher than analysts’ estimates of Rs 5,380-5,410 crore.
The company became the first company in the country to achieve quarterly turnover or sales of more than Rs 1 lakh crore in a quarter. Its turnover during the quarter stood at Rs 1,06,523 crore, against Rs 93,266 crore in the previous quarter.“RIL’s performance in the first half of the year reflects the resilience of our business model in a period of volatility and uncertainty. Our diversified and integrated petrochemicals business captured margins across segments — delivering near-record profit levels, even as the domestic economy slowed,” said RIL Chairman Mukesh Ambani.
The company’s gross refining margins (GRM) — earnings from processing every barrel of crude oil — stood at $7.7 a barrel, compared with $9.5 a barrel in the same quarter a year ago. Reuters’ Singapore benchmark GRMs were down to a 12-quarter low of $5.4 a barrel during the quarter. However, revenues for its refining and marketing segment rose 16.2 per cent to Rs 97,456 crore.
“Optimal utilisation of best-in-class refinery assets and inherent flexibility in sourcing, product delivery contributed to healthy operating profits from our refining business,” added Ambani.
“RIL’s numbers are led by growth in core business and other income has not contributed much to the overall profitability,” said Jagannadham Thunuguntla, equity head, strategist & head of research, SMC Capitals.The company’s revenue from petrochemical segment rose 12.8 per cent to Rs 24,892 crore, from Rs 22,058 crore in the September quarter last year. It said its petrochemicals business performance was boosted by higher volumes, stable demand, improved deltas for key polymers & fibre intermediates, and favourable exchange rate movement. “Though polyester margins were weak, RIL benefitted due to integrated chain economics,” the company said in a press statement.
“A petrochemicals margin of over 10 per cent is excellent and even refining margins came beyond expectations,” said Destimoney Securities President Sudip Bandyopadhyay.
On the retail business front, RIL posted 31 per cent sales growth during the quarter, compared with the same period a year ago.
“The company’s retail business continues to break new ground, growing 41 per cent in the first half of 2013-14. Reliance’s ongoing counter-cyclical investments will strengthen our competitive position in each business segment,” Ambani added.
RIL said, during the quarter, the retail business crossed a significant milestone of operating 10 million square feet of retail space, with an addition of 58 stores across all formats. The business now operates over 1,550 stores across 136 Indian cities. Revenue from its shale gas business stood at Rs 1,208.5 crore - year-on-year growth of 33 per cent.
"There continues to be focus on operational, cost and efficiency improvements," RIL said.
The company's average combined daily production for its three joint ventures stood at 875 million standard cubic feet per day during the quarter. "As at the end of the second quarter of 2013-14, the cumulative number of producing wells stood at 550, compared with 309 at the end of the second quarter of 2012-13 and 494 wells at the end of the first quarter of this financial year," RIL added.
Ahead of the results, the RIL scrip gained 0.84 per cent from its previous close to Rs 870.25 on BSE. The BSE Oil & Gas Index gained 0.35 per cent to close at 8,554.95. The results were declared after the end of Monday's trading session.
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