RIL net up 13.7%, just misses $1 bn

Reliance Industries Ltd (RIL) on Saturday posted a 13.7 per cent jump in its first quarter net profit to almost $1 billion, the highest ever quarterly profit by an Indian private sector company, on the back of higher refining margins, better petrochem earnings and surge in US shale gas business. The net profit in April-June rose to Rs 5,957 crore, or Rs 20.3 per share, up 13.7 per cent from Rs 5,237 crore, or Rs 17.8 a share, in the same period a year ago, the company said in a statement.  Turnover surged 7.2 per cent to Rs 107,905 crore.

‘RIL has delivered a record level of consolidated net profit this quarter,’ said RIL Chairman & Managing Director Mukesh Ambani ‘This was achieved despite weak regional refining margins and a planned turnaround in our refinery.’ The Mumbai-based operator of the world’s biggest oil refinery complex earned $8.7 on turning every barrel of crude oil into fuel in Q1 as compared to $8.4 gross refining margin (GRM) in the same period a year ago. The GRM was, however, lower than $9.3 per barrel in the previous January-March quarter.

While revenue from refinery business rose 7.2 per cent, earnings from petrochemical business soared 9.3 per cent. But the surprise came from the oil and gas production business, which posted a 27.3 per cent rise in revenue and more than doubled pre-tax segment profit. This was largely due to the firm’s US shale gas business, which gave a revenue of Rs 1,617 crore, higher than RIL’s domestic oil gas earning of Rs 1,557 crore.

‘The petrochemicals business performance highlights the strength of our portfolio-mix and end-market diversity,’ Ambani said. ‘We have a great pipeline of new projects which will give Reliance an enduring competitive advantage.’ RIL, he said, was further expanding its retail business in existing markets while exploring newer markets and channels. 

Higher crude oil prices led to 7.2 per cent rise in cost of raw material from Rs 77,069 crore to Rs 82,631 crore. Employee cost also rose to Rs 1,480 crore in Q1 from Rs 1,415 crore a year ago. Other income fell to Rs 1,974 crore from Rs 2,392 crore. Stability in the rupee helped prune interest cost on debt to Rs 505 crore from Rs 938 crore in Q1 of last fiscal. 

RIL’s outstanding debt was marginally lower at Rs 135,769 crore as on June 30, 2014 when compared to Rs 138,761 crore as on March 31, 2014. It had a cash balance of Rs 81,559 crore. Earnings from the refinery business rose 7.2 per cent to Rs 98,081 crore, while segment pre-tax profit was up 29.4 per cent at Rs 3,814 crore. During the quarter, RIL’s Jamnagar refineries processed 16.7 million tonnes, which translates into 108 per cent of the installed capacity.