This is the first time that RIL has decided to publish its consolidated financial performance, which includes the performance of its retail business. RILs chief financial officer Alok Agarwal said in future, RIL will publish its consolidated financial numbers every quarter. Earlier, the conglomerate published its standalone results that took into account the refining, petrochemicals and upstream oil & gas businesses.
The Mukesh Ambani-led conglomerates consolidated revenues for the quarter ended June 30 stood at Rs 1.07 lakh crore, up 1.6% sequentially and 7.2% over the year earlier.
The growth in consolidated net profit that RIL has showcased in the June quarter was largely due to its retail business, which reported an operating profit of Rs 81 crore, up 237.5% over the January-March period.
On a standalone basis, RILs net profit remained flat quarter-on-quarter at Rs 5,649 crore and rose 5.55% over the year earlier. The standalone numbers reported by RIL exceeded analysts expectations, who had estimated net profit to be lower quarter-on-quarter due to a weak refining margin.
The Bloomberg consensus of RILs earnings estimates for the first quarter of FY15 had pegged the companys estimated net profit at Rs 5,434 crore, down 3.6% quarter-on-quarter and up by a marginal 1.5% over the corresponding period a year ago. The consensus had estimated RILs revenues at Rs 98,386 crore, up 3.35% over the January-March quarter, and 12.2% higher year-on-year.
The companys standalone revenues came in at Rs 96,351 crore, 1.2% higher sequentially and around 10% higher over the year earlier.
RIL has achieved a record level of consolidated net profit this quarter, RIL chairman Mukesh Ambani said in a statement. This was achieved despite weak regional refining margins and a planned turnaround in the refinery.
RILs standalone financials could have appeared worse, but a change in rules for accounting depreciation and lower interest costs helped the company maintain its bottomline in the last quarter.
Due to a change in the guidelines for accounting depreciation in accordance with the new Companies Act, which aligns it with the useful economic life of an asset, depreciation cost has been lower by around Rs 200 crore in the current quarter (compared to the March quarter), Agarwal said.
RILs consolidated interest expenses in the April-June period were also considerably lower at Rs 505 crore, around half of what they were in the preceding quarter. In the January-March period, RILs interest expenses had substa- ntially gone up since a large part of its debt has been borrowed overseas and the rupee had significantly depreciated against the dollar during that quarter. However, in the June quarter, the rupee gained against the dollar, bringing down RILs finance costs.
RILs gross refining margins (GRM), or the difference between the value of petroleum products sold and the cost of processing crude, came in at $8.7 per barrel in the June quarter, significantly lower than the $9.3 realised in the preceding quarter. The weakness in GRMs was mainly on account of weakness in margins of products like fuel oil, diesel and jet fuel. The regional benchmark Singapore GRM averaged at $5.8 per barrel for the quarter. The lower margins also sequentially brought down overall operating profit from the oil and gas business for RIL.
Operating revenues and profit from RILs petrochemicals business were also lower sequentially due to lower weaker margins in the upstream polyester chain, which includes fibre intermediates. This was caused due to a lot of excess capacity in China. The companys oil and gas business did well during the quarter, with a 37% sequential increase in operating profit at Rs 1,042 crore, and a 14% jump in revenues to Rs 3,178 crore. This was mainly due to RILs shale gas business in the US continuing to perform well and higher condensate production and shipment in India. With geopolitical tension in Iraq pushing the prices of crude higher, RILs realisations from the oil and gas business also improved.
Gas production from RILs flagship gas producing asset, the D6 reservoir in the Krishna Godavari basin, averaged 13 million British thermal unit (mBtu) in the April-June period, the same as in the preceding three months.
Agarwal said RIL would be incurring a capital expenditure of around Rs 35,000 crore in the current fiscal towards augmentation of capacity and improving efficiency in the petrochemicals and refining businesses; and for strengthening the retail and upcoming telecom businesses. As on June 30, RIL had cash and cash equivalents to the tune of Rs 81,559 crore and a net debt of Rs 54,210 crore at a consolidated level.