Reliance reports record profit on back of gains from stake sale, Jio

New Delhi: Reliance Industries Ltd (RIL) on Thursday reported record net profit of Rs 13,248 crore in June quarter after one-time gain from stake sale as well as bumper telecom revenues cushioned COVID-19-hit earnings from refining, petchem and retail segments.

The net profit in April-June was 30.6 per cent higher than it was in the same period a year back, and bettered the company's previous best of Rs 11,640 crore earning in October-December 2019, the company said in a statement.

The oil-to-telecom conglomerate said it had a one-time gain of Rs 4,966 crore from sale of 49 per cent stake in fuel retailing venture to BP plc.

This together with 183 per cent jump in Reliance Jio's standalone net profit to Rs 2,520 crore covered up drop in earnings from mainstay segments.

EBITDA (earnings before interest, taxes, depreciation, and amortisation) declined by 11.8 per cent to Rs 21,585 crore "due to lower contribution from oil-to-chemical (O2C) business, which was impacted by significant demand destruction and margin pressure across transportation fuels and polyester chain". Also, lower realisation in the export market also impacted profitability. "Closure of stores and restrictions on operations across the country due to COVID-19 contributed to a decrease in EBITDA of Retail business. This was partially offset by an increase in EBITDA of Digital services business due to improved margins and continued subscriber momentum," it said.

RIL Chairman Mukesh D Ambani said: "The severe demand destruction due to global lockdowns impacted our hydrocarbons business but the flexibility in our operations enabled us to operate at near normal levels and deliver industry-leading results".

He said the company raised record funds during the quarter despite COVID-19 lockdown.

The company raised Rs 53,124 crore through a rights issue and sold near 33 per cent stake in Jio Platforms Ltd - the firm that houses telecom business and apps - to likes of Facebook and Google for Rs 1,52,056 crore. It also sold a 49 per cent stake in the fuel retailing business to BP for Rs 7,629 crore.

"We completed the largest fund raise in Indian corporate history in this quarter," Ambani said. With coronavirus lockdown shutting down malls and markets for the most part of the quarter, Reliance Retail - which operates consumer electronic stores, fashion outlets, and grocery stores - saw revenues dip 17 per cent to Rs 31,633 crore and segment pre-tax profit fall 47.4 per cent to Rs 1,083 crore.

Petrochemical revenues declined 33 per cent due to lower price realisations with disruptions in local and regional markets due to the pandemic outbreak. Oil refining revenues more than halved to Rs 46,642 crore after the company earned its lowest margin in a decade on turning every barrel of crude oil into fuel. Gross refining margin of $6.3 per barrel compared to $8.1 GRM a year back and $8.9 per barrel in the preceding

quarter.