Millennium Post

RIL profit slips for first time in 9 quarters; Q3 Net down 4.5%

Net profit in October-December 2013 quarter stood at Rs 5,502 crore, or Rs 18.7 a share while profit was Rs 5,972 crore, or Rs 20.3 per share, in June-September 2014 quarter. RIL, the operator of world’s biggest oil-refinery complex, earned $7.3 for turning every barrel of crude oil into fuel in third quarter as compared to $7.6 a barrel gross refining margin (GRM) a year ago. The GRM in December 2014 quarter was also lower than $8.3 per barrel in the previous July-September quarter.

“The quarter witnessed heightened volatility across the hydrocarbon business. Benchmark crude oil prices declined by around 40 per cent through the quarter, with consequent impact on petrochemical feedstock and product prices,” the company today said in a statement. Declining feedstock prices impacted buying sentiment across product categories, it said.

Commenting on the results, Mukesh D Ambani, Chairman and Managing Director, RIL said: “Our focus on operational efficiency and the superior configuration of assets helped us deliver an industry-leading performance in the refining and petrochemicals business despite sharp decline in crude and feedstock prices.” RIL, he said, continued to advance margin adding refining and petrochemicals business capital investments, which will come to fruition over the next 4-6 quarters.

“These investments demonstrate our commitment to creating value through the business cycle,” he said. Turnover dipped 20.4 per cent to Rs 96,330 crore in the December 2014 quarter. Exports also declined by 21.5 per cent to Rs 58,507 crore. While debt rose to Rs 150,007 crore from Rs 142,084 crore as on September 30, 2014, cash-in-hand fell to Rs 78,691 crore as on December 31 from Rs 83,456 crore at the end of previous first quarter.

Earning from refining business fell 24.1 per cent to Rs 81,777 crore while the segment pre-tax profit was down 15 per cent at Rs 3,267 crore. Petrochemical business revenue too was down 15.2 per cent at Rs 23,001 and segment profit was down 2.4 per cent at Rs 2,064 crore. Upstream oil and gas continued to slide with drop in the prime KG-D6 field production. Segment revenue slid 22.3 per cent to Rs 1,347 crore while pre-tax profit halved to Rs 267 crore.

“Fall in gas production (in KG-D6) is mainly due to natural decline in the fields partly offset by incremental production from new well MA08 and side track in well MA6H which was implemented in 2H FY14,” the statement said.

“Reliance results are broadly in-line with estimates,” said a report by Morningstar India. RIL said its retail business defied the trend and continued to grow with turnover rising by 19 per cent to Rs 4,686 crore.
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