Reliance Industries Ltd. (RIL) has reported a net profit of Rs.5,352 crore for the first quarter ended June 30, 2013, as compared to Rs.4,503 crore in the same period last year, up 18.9 per cent, due to higher refining margins and rise in other income.
The spurt in net profit was despite 4.6 per cent decline in first quarter turnover of Rs.90,589 crore as compared to Rs.94,927 crore.
Other income increased from Rs.1,904 crore to Rs.2,535 crore on account of a larger cash balance.
“Our performance this quarter reflects higher operating rates and embedded options in crude sourcing and product placement, given the size and scale of the refining business.” Mukesh Ambani, Chairman and Managing Director, RIL, said in a statement.
“Robust growth in petrochemical products demand augurs well for our biggest-ever expansion programme. Retail business continues to make remarkable progress and registered a 53 per cent growth in revenues during the first quarter,” he added.
The decline in revenue was on account of 3.4 per cent drop in volume and a 1.2 per cent drop in price.
In the oil and gas business, RIL reported 42 per cent drop in revenue to Rs.1,454 crore from Rs.2,508 crore.
In domestic operations, KG-D6 field produced 0.5 million barrels of crude oil, 0.06 million barrels of condensate and 49.2 bcf (billion cubic feet) of natural gas, a reduction of 41 per cent, 58 per cent and 53 per cent, respectively on a year-on-year basis.
“Fall in production is mainly attributed to geological complexity, natural decline in the fields and higher than envisaged water ingress,” the company said.
In refining, the company reported gross refining margin (GRM) of $8.4 per barrel as compared to $7.6 per barrel in the first quarter of the previous year.
During the quarter, RIL Jamnagar refineries processed 17.1 million tonnes of crude and achieved an average utilisation rate of 110 per cent.
RIL shares closed with a gain of 0.67 per cent at Rs.923.15 on the BSE ahead of the announcement of the results.
“The numbers are in line with expectations. Profitability increased because they managed to improve the refining margins and higher contribution came from treasury portfolio. Everyone is eying for the roll out of the broadband service,” said Devan Choksey, Managing Director, KR Choksey Shares and Securities.
“The first quarter profit after tax is in line with street expectation, but earnings before interest, tax, depreciation and amortisation (EBITDA) at Rs.7,100 crore is disappointing. Petrochemicals margin at 8.6 per cent remains flat quarter-on-quarter which is disappointing. GRM is as per expectation at $8.4/bbl,” said Nitin Tiwari, Energy Sector Analyst, Religare Institutional Research.