Mumbai, July 28: Reliance Industries today reported a 28.2 per cent rise in net profit for the first quarter ended June 30, beating Street estimates.
RIL’s net profit surged to Rs 3,264 crore from Rs 2,547 crore in the year-ago period. Analysts had expected the oil company to report a net profit at around Rs 3,000 crore.
RIL’s two key businesses — petrochemicals and refining & marketing — performed well during the period. In the previous two quarters, it was the refining & marketing segment’s robust gross refining margins that largely contributed to the company’s growth in bottomline.
The gross refining margin, which is the difference between value of petroleum products produced and the price of crude, rose to $15.4 per barrel compared with $12.4 per barrel in the same period last year. The refining margin in the last quarter of 2006-07 was $13 per barrel.
The figures topped analyst expectations and came at a time when the quarter saw high refinery utilisation rates in the backdrop of strong demand for transportation products and a global shortage in refining capacity.
RIL has been exporting products because the lack of a level-playing field for private sector marketing companies has put domestic marketing margins under pressure.
RIL’s gross refining margins were the highest-ever during the period since the company’s inception.
According to analysts, for a long time the company had outperformed the Singapore benchmark for gross refining margin. This performance was the result of RIL’s complex refinery along with the most efficient liquid port and locational advantages.
Margins for the refining business increased to 11.2 per cent against 9.8 per cent in the same period last year and revenues from this segment rose 9.3 per cent to Rs 22,794 crore compared with Rs 20,862 crore last year.
A positive surprise also came from the petrochemical segment. Revenues rose to Rs 10,844 crore from Rs 9,787 crore last year while margins gained 13.7 per cent from 11.1 per cent in the year-ago period.
Except for polyethylene, other products such as polyester and polypropylene showed better margins.
The company’s turnover shot 12.7 per cent to Rs 29,493 crore from Rs 26,166 crore in the same period last year. Exports crossed the $4-billion mark, showing a rise of 30 per cent.
Reliance chief Mukesh Ambani said, “I am delighted to report yet another quarter of outstanding performance. Our world-class manufacturing facilities have demonstrated a high operating leverage by delivering superior margins and record profits. We continue to make rapid strides in our new initiatives including oil and gas, organised retailing and the new refinery at RPL.”
“While our existing businesses continue to deliver a robust operating performance, our new initiatives provide us a platform to deliver superior shareholder returns in the future,” Ambani added.