18 October 2007

RIL nudges $1 bn Q2 net with 28% surge

MUMBAI: Reliance Industries (RIL), India’s largest company by market capitalisation, has become the first private sector firm to post a net profit of close to $1 billion in a single quarter. RIL is now short of the $1 billion (Rs 3,947 crore) mark by Rs 110 crore, after it posted a net profit of Rs 3,837 crore in the July-September quarter.


Beating Street expectations, the company posted a 28% increase in net profit, up from Rs 3,000 crore during the same period last year. Net profit in the September quarter last year, has been restated after the merger of IPCL. The increased profit was on a turnover of Rs 33,402 crore compared to Rs 31,422 crore in the same period last year. Profits have grown largely on higher margins and the merger with Indian Petrochemicals Corporation (IPCL). Refining contributed to 63% (Rs 23,575 crore) of the total revenues, while petrochemicals made up for the remaining 35% (12,916 crore).

Though the company registered a 1.2% increase in operating margins during the quarter, it translated into 14% higher operating profit at Rs 5,781 crore. Other income went up 34%, while the interest and depreciation costs came down, resulting in 24% higher PBT at Rs 4,563 crore during the quarter. A fall in deferred tax provisions helped the bottomline gain Rs 3837 crore.

The company has not accounted for forex gains of Rs 515 crore on foreign currency borrowings. Analysts attributed the growth to “strong refining margins and higher refinery throughput.” Profit before interest and tax from this segment zoomed 56% to Rs 2,321 crore. The petrochemicals segment, however, witnessed a 4% fall in PBIT to Rs 2,025 crore from Rs 2102 crore in September 2006 quarter. During the half year, RIL’s 33 metric tonnes per annum refinery processed 16.1 million tonnes of crude, an increase of 3% with an operating rate of 98%. RIL exported refined products worth $6.99 billion, accounting for 60% of the production volumes.

RIL’s gross refining margins (GRMs) in Q2 stood at $13.6 per barrel against the Singapore benchmark of $6.4 per barrel. This was primarily due to the superior configuration of the refinery, which allows flexibility to focus on the production of middle distillate products (gasoil and jet kerosene), where margins remained firm with strong global demand. The company processed four new crudes at its refinery in the last six months. Globally, while refinery outages led to spikes in margins, RIL has maintained its high operating rate to take advantage of these opportunities. RIL’s petrochemical business benefited from higher volumes through integration of IPCL.

The petrochemical production grew 7% in the last half year to 9.8 million tonnes against 9.1 million tonnes during the first half of 2006-07. In Q2, revenues from the petrochemical segment increased by just 1% to Rs 12,961 crore against Rs 12,888 crore during the Q2 of last fiscal. High feedstock prices have impacted the petrochemicals business globally, but strong domestic demand provided integrated players like RIL the flexibility to pass on the increase in polyester and polymer prices, expanding margins. RIL has revalued its plants, equipment and buildings, resulting in additional depreciation of Rs 890 crore.

The company saved Rs 957 crore ($2.4 billion) in the last six months by reducing its other expenditure, primarily due to lower incidence of sales tax on account of higher export of refinery products and exchange differences. On BSE, RIL shares closed at Rs 2575.90, down 4.25% or Rs 114.40 in a highly volatile market. The results were announced after the closure of market hours.


We thank (will be grateful to) the owners of the above articles/sites/sources/Govts www.theeconomictimes.com allowing/referring this. We are just providing the link/information of business updates from the leading sources for the benefit of readers.

No comments: