RIL net profit rises 28% on high refining margin, Gulf Africa sale
SCORECARD Reliance Retail boosts revenues; Jio announces rights issue to raise ₹20,000 crore
MUMBAI: Energy giant Reliance Industries Ltd (RIL) on Thursday reported a consolidated quarterly net profit increase of 28%, beating analysts’ estimates, helped by higher-than-expected refining and petrochemicals margins and a one-time gain.
Net profit rose to ₹9,079 crore in the quarter ended June from ₹7,077 crore a year earlier, said the country’s biggest company by market value which also has businesses ranging from retail and yarn to telecom. Revenue rose to ₹92,661 crore, a 25.5% rise from ₹73,829 crore a year ago.
According to a Bloomberg poll of six brokers, RIL had been expected to post a net profit of ₹7,764.5 crore for the three months ended June 30 on net sales of ₹76,326 crore.
Net profit was boosted by a one-time gain of ₹1,087 crore from the sale of the firm’s 76% stake in Gulf Africa Petroleum Corp, a South African subsidiary.
RIL’s gross refining margin, or what the company earns from turning every barrel of crude oil into fuel, came in higher than expected at $11.9 per barrel. That was a premium of $5.5 per barrel to Singapore’s benchmark margin, which averaged $6.4 per barrel in the quarter.
Analysts had expected RIL to post a GRM between $10.5 and $11.2 per barrel. Over the past few quarters, RIL has been reporting a premium of $4-5 per barrel to the Singapore benchmark.
RIL is the operator of the world’s biggest oil refining complex, at Jamnagar in Gujarat, with a refining capacity of 1.24 million barrels of oil per day.
“RIL’s numbers came in above our expectations,” said Sudeep Anand, head of institutional research at IDBI Capital. “Both refining and petrochemicals segments surprised positively on the revenue and Ebitda fronts. GRMs are very strong despite weaker product cracks.” Ebitda stands for earnings before interest, tax, depreciation and amortisation.
In the June quarter, oil prices fell to an average $50.8 per barrel from $54.6 in the March quarter.
“Strong refining and petrochemicals margin environment contributed to higher operating profits,” RIL said in a statement.
Operating profit before other income and depreciation increased by 11.9% from a year ago to ₹12,554 crore.
For the refining and marketing segment, Ebit (earnings before interest and tax) increased by 13.4% to $7,476 crore. The petrochemicals segment saw Ebit increase by a sharper 43.7% to ₹4,031 crore, supported by volume growth. The Ebit margin for the quarter was 15.8%.
Consolidated revenue was also boosted by Reliance Retail. The unit’s revenue grew 73.6% from a year ago to ₹11,571 crore.
Meanwhile, earlier on Thursday, Reliance Jio Infocomm Ltd announced a rights issue to raise ₹20,000 crore via optionally convertible preferential shares. RIL has a 99.44%stake in Jio.