Reliance Industries consumer business drives June quarter show

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Published: July 20, 2019 1:46:50 AM

Petrochemicals segment Ebit fell 4.4% on year-on-year basis at Rs 7,508 crore. Petrochemicals segment Ebit was primarily affected by lower volumes.

During Q1FY20, the benchmark Singapore complex margin averaged $ 3.5/bbl as compared to /bbl in Q1FY19.

Reliance Industries (RIL), the country’s most valuable company by market cap, reported a 6.8% increase in its net profit to `10,104 crore for the quarter-ending June, beating Bloomberg consensus estimates.  Even though the quarter was a very volatile one, what came to the rescue was the healthy growth in its consumer businesses, which accounted for 32% of consolidated Ebitda during the quarter.
Revenues for the June quarter of FY20 increased 22.1% to `172,956 crore, which were led by sharp increase in revenue from digital services and retail businesses. The company’s operating income rose 9.1% to `24,486 crore.

The operating environment for both the downstream businesses, refining and petchem, has been challenging for the last six quarters and the first quarter was tougher due to geopolitical exacerbating crude markets. The company officials could not give an indication as how long the situation would persist.

Commenting on the results, chairman and managing director of Reliance Industries, Mukesh Ambani, said: “Our first quarter earnings were strong despite weak global macro-economic environment and challenging hydrocarbon market conditions.” The first quarter gross refining margins (GRMs) came in at $8.1/barrel (bbl) against $10.5/bbl in the same period last year. RIL’s refining marging of $8.1/bbl outperformed Singapore’s complex margins by $4.6/bbl.

Revenues from the refining and marketing segment increased 6.4% year-on-year to `101,721 crore, while segment Ebit declined by 15.2% y-o-y to `4,508 crore. Higher volumes contributed to the revenues but performance was impacted by lower product cracks compared to the corresponding quarter last year. During Q1FY20, the benchmark Singapore complex margin averaged $ 3.5/bbl as compared to $6 /bbl in Q1FY19.

“The performance reflects the benefits of deep refining and petrochemicals integration, chain economics and feedstock flexibility,” Ambani said.

RIL’s petrochemical business witnessed its segment revenue fall by 6.6% year-on-year to `37,611 crore. Petrochemicals segment Ebit fell 4.4% on year-on-year basis at `7,508 crore. Petrochemicals segment Ebit was primarily affected by lower volumes. Petrochemical segment recorded an Ebit margin of 20%.

Reliance Retail recorded its highest ever revenues and business PBDIT. Segment Revenue for the first quarter grew by 47.5% y-o-y to `38,196 crore against `25,890 crore in the corresponding period of the previous year.
Segment Ebitda for the first quarter grew by 69.9% y-o-y to `2,049 crore against `1,206 crore in the corresponding period of the previous year.

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