The integrated refining and petrochemicals biz generated strong cash flows in a period of heightened volatility in the commodity and currency markets, RIL said.
Reliance Industries (RIL) on Wednesday posted a record net quarterly profit for the July-September quarter at Rs 9,516 crore, an increase of 17.35% compared to the same period last year.
Revenue from operations (net of excise duty) rose 56.66% Y-o-Y to Rs1,43,323 crore, primarily on account of higher price realisations of petrochemical and refinery products led by a 44.5% increase in Brent crude price.
The second quarter gross refining margins (GRMs) came in lower at $9.5/barrel (bbl) against $12.0/bbl in the same period last year. During Q2FY19, the benchmark Singapore complex margin averaged $6.1/bbl, compared to $6.0 /bbl in Q1FY19 and $8.3/bbl in Q2 FY18.
“Higher fuel oil and LPG cracks more than offset the impact of lower cracks for gasoline and jet fuel. Shrinking spare production capacity and higher demand for crude oil continued to support prices despite higher production from Saudi Arabia, Russia, the US, Iraq, Kuwait and the UAE,” RIL said in its statement.
Chairman and managing director Mukesh Ambani said the company’s integrated refining and petrochemicals business generated strong cash flows in a period of heightened volatility in the commodity and currency markets. “Our world-class 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,” he said.
The refining and marketing business, which is a major contributor to the overall revenue, delivered a 41.6% jump in segment revenue at `98,760 crore in the quarter under review.
However, the segment EBIT saw a 19.6% drop to Rs 5,322 crore in the second quarter. This excludes exceptional item of `1,087 crore, representing profit from divestment of stake in Gulf Africa Petroleum Corporation (GAPCO) during the first half of FY18.
RIL said the performance of the refining and marketing business was impacted by significantly higher crude price (up 47% Y-o-Y), tighter light-heavy differential and adverse movement in light distillate cracks on Y-o-Y basis and shutdown of the fluid catalytic cracking unit.
Srikanth Venkatachari, joint CFO, said during a media interaction that some of these factors won’t be existing in the quarter to come. “Some of the factors like the impact due to the shutdown of the FCC will not be seen in the coming quarter.”
Revenue from the petrochemical business witnessed a 56.2% year-on-year rise to `43,745 crore due to increase in volumes and price realisation. Petrochemicals segment EBIT was at a record level of `8,120 crore ($1.1 billion), supported by a strong Y-o-Y volume growth, RIL said.
The organised retail business saw a 121.5% rise in revenue to Rs 32,436 crore. The segment EBIT witnessed an increase of 272.5% to Rs 1,244 crore.