RIL net up 28% on gas output, refining margins

Written by fe Bureaus | Mumbai | Updated: Oct 31 2010, 04:42am hrs
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Reliance Industries Limited (RIL) on Saturday reported its highest ever net profit of Rs 4,923 crore in the three months to September 2010, an increase of 27.8% year on year, largely in line with the Street expectations. Net profit in September 2009 quarter was Rs 3,852 crore.The oil and petrochemicals major announced a rise in turnover of 22.8% year on year to Rs 59,962 crore for the September quarter and a growth in the profit before interest tax and depreciation of 28.3% to Rs 10,068 crore. On Friday, the RIL scrip closed at Rs 1,095.80 on the Bombay Stock Exchange.

RIL chairman and managing director Mukesh Ambani observed improved refining margins and high operating rates at all manufacturing facilities had led to a record quarter. He added, We are focussed on identifying opportunities that leverage Indias unique demographic and market potential.

Gross refining margins for the September quarter was $7.9 a barrel, slightly higher than the $7.3-a-barrel margin seen in the June quarter and in keeping with the sequential improvement seen for Singapore complex margins of around 60 cent a barrel. Earnings before interest and profit margins for the exploration business were, however, lower at just under 40% owing to a shutdown in the Panna-Mukta fields.

The demand for both oil and petrochemicals has been strong, especially in some emerging markets and the outlook for both appears to be good with construction and industrial activity on the rise, an analyst from a leading brokerage observed. He added although it was true that capacity addition in the petrochemicals industry had been delayed, with a couple of facilities not being commissioned as expected, demand was nonetheless expected to remain robust. There is a pick up in demand and even if capacity is added two quarters down the line, it should sustain, he explained. Demand for transportation fuels, including diesel and petrol, too remained fairly good, analysts pointed out.

In the six months to September, RILs turnover rose 48.8% year on year to Rs 120,969 crore with higher volumes, up nearly 30%, accounting for the bulk of the growth. About 583,348 tonne crude oil and 10,699 mmscm of natural gas was produced at the KG D6 basin, a growth of 163% and 122%, respectively. Exports were higher by nearly 60% while operating profit before other income and depreciation grew 37.8% to Rs 18,738 crore. RILs outstanding debt at September end was Rs 68,198 crore compared with Rs 62, 495 crore at March end. Cash and cash equivalents amounted to just under Rs 30,000 crore.