RIL Q2 net up 7% at Rs 4122 crore
Reliance Industries posted 7.42 per cent rise in net profit of Rs 4122 crore for the quarter ended September 30, 2008 as compared to Rs 3837 crore in the same quarter previous year. Total income increased to Rs 44,938 crore in the September quarter from Rs 32,211 crore a year ago. Analysts had forecast a net profit of Rs 3920 crore. Net revenue at the company, India's most valuable with a market value of $45 billion, grew to Rs 4479 crore from Rs 3204 crore. Reliance's refining margins for the quarter were $13.4 a barrel television news channels reported, well above the benchmark Asian Dubai crack margin, which averaged about $5.8 a barrel in the period.
On Thursday, Shares of Reliance Industries slumped 7.62 per cent to close at Rs 1215.25 in a weak market.
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Reliance Ind Q2 net up 7.4% at Rs 4,122cr
Reliance Industries (RIL), the largest private oil refiner in India, has posted a 7.4 per cent rise in profit at Rs 4,122 crore in the second quarter as the price of petroleum products shot up globally in line with crude oil prices.
During the quarter, RIL’s revenue from sale of refined petroleum products was up by 54 per cent at Rs 36,393 crore when the crude oil price was hovering around $100 a barrel. The revenue from exports has surged 51 per cent at Rs 29,823 crore. The company exports products mainly to the US, Europe and West Asia after its stopped sales in the domestic market.
The company, controlled by Mukesh Ambani, has registered a 38 per cent rise in net sales at Rs 46,113 crore, partly helped by a 19.9 per cent and a 56 per cent growth in revenue from petrochemicals and oil and gas segments, respectively. The net turnover has jumped 39.7 per cent to Rs 44,787 crore.
For the business expansion, mainly for the production of gas and oil from Krishna-Godavari basin, the company spent Rs 11,401 crore in the first six months of the fiscal, RIL said in statement.
“It has been an exciting quarter at Reliance Industries. We have started production of oil from the KG basin and soon will emerge as key hydrocarbons major. At Reliance, we are at the final leg of capital expenditure in our key businesses and will see cash flows from these investments in the following quarters. Leading economies across the globe are passing through some unprecedented times. Our businesses are gearing up to meet these emerging challenges,” said Mukesh Ambani, chairman and managing director of RIL.
Beating market expectations, the company’s gross refining margin (GRM) stood at $13.4 a barrel, a premium of $7.4 a barrel over Singapore benchmark. It is well above the benchmark Asian Dubai crack margin, which averaged about $5.8 a barrel in the period.
Analysts tracking oil companies had predicted earlier that RIL, which controls around 22 per cent of India's refining capacity, too would report refining margins of less than $13 per barrel during the quarter, compared with over $15 per barrel in the June quarter. Motilal Oswal in its recent report predicted that the GRM would be around $13 a barrel.
Expenditure shot up 44.4 per cent to Rs 39,577 crore with the price rise of crude, the major raw material for RIL’s Jamnagar refinery, which contributes about 65 per cent of its revenues. The raw material cost stood at Rs 34,978 crore, up 60 per cent. The depreciation of assets and purchases of chemicals and catalysts in the quarter cost about Rs 2,401 crore.
The Jamanagar refinery has processed 8.21 million tonne of crude during the second quarter, while the company’s petrochemicals production remained flat.
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RIL's Q2 net performance may not lift sentiments
Reliance Industries — India’s largest company by market capitalisation and one of the most widely held stock — is unlikely to liven up the ma
rket when it announces its second-quarter result on Thursday. RIL’s profit for the quarter is expected to grow only marginally, or even dip, compared with the year-ago period. “Reliance has come out with steady results in volatile markets. However, RIL will struggle to touch two-digit profit figure this quarter because of the slowdown in refining margins. On the other hand, improved margins in petrochemical business could result in flat growth in net profit,” said an analyst working with a leading international brokerage. The petroleum refining industry has entered a slowdown phase globally, with the gross refining margins (GRM) — the differential between prices of crude oil and refined products — coming down from the previous quarter. As a result, RIL’s petroleum refining business, which contributes nearly two-third to its revenues, is likely to record a lacklustre performance in the latest quarter. Analyst estimates put RIL’s GRMs in the $11-$13 per barrel range, weaker from $15.7 posted in June 2008 quarter and $13.7 in September 2007 quarter. This means its refining profits will be lower on a year-on-year basis. In contrast, RIL’s petrochemicals business is expected to post healthy revenues and improved margins due to stagnancy in feedstock naphtha prices. Petrochemicals represent around 30% of RIL’s revenues and profits. The smaller segment of oil and gas production is also likely to perform well due to higher petroleum prices in the September 2008 quarter compared with the previous year. Weakness in the rupee is another factor that will impact RIL’s performance. Despite being India’s largest exporter, RIL has always had more imports than exports. Particularly, a major chunk of its petrochemicals is sold domestically within India. However, since the domestic petrochemical prices are linked to their import parity prices, RIL is likely to benefit from the weak rupee. “We expect RIL’s petrochemical EBIT to rise 5% y-o-y to Rs 2,130 crore mainly driven by a weaker rupee,” mentioned a Merrill Lynch report. Brokerage houses remain divided on whether RIL will report any profit growth this quarter. Among them, Angel Broking is the most bearish on RIL, projecting a 13% fall in its Q2 profits. As against this, Motilal Oswal and Sharekhan are the most bullish, estimating around 9% increase in RIL’s bottomline. The estimates of other brokerages like Prabhudas Leeladhar, Merrill Lynch, Citi Investment Research are somewhere in between. The company is expected to post good profits in the coming quarters because of sale of oil and gas from the Krishna Godavari (KG) basin.
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Reliance Industries Q2 net up at Rs 4122 cr
RIL Q2 net up 7.4%; high oil prices push revenue by 39.5%
Source:ET,Sify,BS,BL