NEW DELHI: Reliance Industries posted a 17.4 per cent year-on-year (y-o-y) jump in net profit at Rs 9,516 crore for the second quarter of the financial year propelled by the performance of petrochemicals, retail and digital segments compensating for a softer refining margin. Gross refining margin came in lower at $9.5 per barrel compared to $12 per barrel a year ago. Higher crude oil prices led to a revenue surge of 54.5 per cent y-o-y at Rs 1,56,291 crore.
“Our petrochemicals assets contributed record earnings; endorsing benefits of diversified feedstock, integration and superior product portfolio. Use of ethane feedstock at Nagothane cracker from this quarter has further enhanced feedstock optionality,” said CMD Mukesh Ambani. Exports during the quarter also rose 45.5 per cent y-o-y to Rs 60,460 crore ($ 8.3 billion) on higher petrochemical product volumes and higher product prices in petrochemical and refining business. Capital expenditure incurred in the previous years on the petrochemical segment is paying off with considerably higher volumes. Interest payments, however, have also shot up to Rs 3,932 crore during the quarter as against Rs 2,272 crore last year as it borrowed more to fund its expansion of petrochemicals and digital businesses. RIL’s outstanding debt rose to Rs 2,58,701 crore as on September from Rs 2,18,763 crore as on March 31, 2018.
The recent move by the government to push public sector refining and marketing companies to absorb Rs 1 a litre on petrol, diesel prices may not impact Reliance much as its exposure to domestic retail fuel market is limited, said V Srikanth, joint CFO, adding however that “there is going to be some demand implications as oil prices remain high”. Reliance has also brought Iranian crude imports to zero ahead of impending US sanctions, while looking at increasing procurement from other middle eastern sources and US-origin crude.
RIL’s retail segment meanwhile, recorded a doubling of sales for the fourth consecutive quarter and a tripling of profits for the third consecutive quarter, according to Srikanth.
Meanwhile, RIL’s rapidly growing telecom venture — Reliance Jio — saw profits rise to Rs 681 crore from Rs 612 crore in the previous quarter. Jio had posted a Rs 271 crore net loss during the same quarter last year.
RIL also announced strategic investments in Den Networks Limited and Hathway Cable and Datacom Limited, picking up a 66 per cent stake in the former for a primary investment of Rs 2,045 crore through a preferential issue and secondary purchase of Rs 245 crore from the existing promoters. In Hathway Cable, RIL has picked up a 51.3 per cent stake for a primary investment of Rs 2,940 crore through a preferential issue.
RIL invests in US rapid transit firm
Reliance Industrial Investments and Holdings, a subsidiary of RIL, has acquired a 12.7 per cent stake SkyTran Inc., which operates in the field of personal rapid transit systems.