The Telegraph
Saturday , January 18 , 2014
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Flat RIL profit meets forecast

Mumbai, Jan. 17: Reliance Industries today reported almost flat net profits at Rs 5,511 crore in the third quarter ended December 31 but still beat analysts’ tepid expectations.

The energy giant’s performance was buoyed by better-than-expected refining margins.

The analyst’s consensus estimate had put RIL’s net profits at Rs 5,340 crore.

Turnover rose 10.5 per cent to Rs 106,383 crore with performance boosted by an 11.3 per cent increase in exports at Rs 74,495 crore (or $12.1 billion). Exports accounted for 70.3 per cent of its total revenues in dollar terms.

Gross refining margins (GRMs) dipped to $7.6 per barrel from $9.6 per barrel a year ago but the company was able to beat the benchmark Singapore margins of $4.3 per barrel largely because the Brent-Dubai price differential narrowed to $2.5 per barrel from $4.1 per barrel in the second quarter ended September 30. A significant amount of crude purchases by RIL is linked to the Brent crude price.

Analysts had expected GRM to average $7.5 a barrel.

The RIL stock closed at Rs 884.55 on the Bombay Stock Exchange, down 0.07 per cent from Thursday’s close. The quarterly results were released after market hours.

Net profits in the nine months ended December 31 rose 6.1 per cent to Rs 16,353 crore from Rs 15,414 crore in the same period a year ago. Nine-month revenues increased 6.7 per cent to Rs 303,495 crore, which is a sure indication that the private sector behemoth will see its full-year revenues easily top the Rs 4-lakh-crore level this year.

“Reliance’s robust refining configuration enabled it to deliver stable refining profits in the third quarter against the backdrop of declining regional benchmark margins. Even as we invest to further strengthen our energy businesses, this quarter demonstrates the outstanding quality of our refining and petrochemical business resources and their ability to deliver creditable performance in a period marked by cyclicality and uncertainties,” said chairman and managing director Mukesh Ambani.

Total exports of refined products reached $30.2 billion in the nine-month period and accounted for 64 per cent of aggregate refinery product volumes. Exports of refined products were 33.7 million tonnes (mt) during the period against 30.9mt during the same period last year.

The company continued to sit on a massive cash mountain worth Rs 88,705 crore, or $14.4 billion, which has been built out of bank deposits, investments in mutual funds, corporate debentures and government securities.

The company reported an outstanding debt of Rs 81,330 crore, which was more than covered by its cash and cash equivalents, making it debt free on a net basis — a secure position it has enjoyed since the end of March 2012.

The KG-D6 gas field produced 135 billion cubic feet of gas in the nine-month period, a sharp 51 per cent reduction from the year-ago level of 275 billion cubic feet.

Crude oil output was also down 38 per cent to 1.45 million barrels and condensate by 44 per cent to 200,000 barrels.

In the previous quarter, RIL and its partners BP and Niko had announced a significant gas and condensate discovery in the KG-D6 block off the eastern coast of India –called D-55 – which it said would add to the hydrocarbon resources in the KG-D6 block. The company said the drilling for the first appraisal well was in progress and expected to be completed by the end of February. It added that two rigs were currently in operation in KG-D6.

Reliance’s shale gas business in the US witnessed strong sequential growth during the quarter and its share of gross production stood at 43 billion cubic feet equivalent (Bcfe), reflecting a growth of 33 per cent year on year.

RIL successfully commissioned state-of-the-art polyester filament yarn (PFY) plant at Silvassa. This is the first plant to be commissioned in petrochemical expansions announced earlier. The total polyester capacity of Reliance increases from 2.4 mmtpa to 2.8mmtpa, the company said.

The retail business grew 38 per cent with revenues rising in the third quarter to 3927 crore. In the nine-month period, retailing revenues jumped 40 per cent to Rs 10,857 crore from Rs 7749 crore in the same period a year ago. The company said it had scrapped its non-vegetarian food retail format Delight in view of “consumer sentiments” but did not amplify on that comment.

Reliance Jio Infocomm – its broadband and telephony subsidiary – became the first telecom operator to get a unified licence in all 22 circles last October which will enable it to offer “all telecom services including voice telephony under a single licence”. It has already signed a flurry of deals with Bharti Airtel and Reliance Communications to tie up telecom infrastructure and fibre optic capacities to offer a full range of telecom services. But it didn’t say when it planned to launch its eagerly awaited service.