Reliance Industries’ (RIL) net profit is down by 6.4 per cent in the second quarter of 2009-10 at Rs. 3,852 crore against Rs. 4,116 crore in the same period of the previous fiscal. For the half-year ended September 30, 2009, it was Rs. 7,518 crore against Rs. 8,220 crore in the year-ago period, a drop of 8.5 per cent.

The turnover for the half-year declined by 8.7 per cent to Rs. 81,284 crore and exports by 26 per cent to Rs. 43,035 crore while the profit before depreciation, interest and tax, increased by 15 per cent to Rs. 14,939 crore. The profit before tax declined marginally by 1.2 per cent to Rs. 9,706 crore. Cash profit increased by 7.3 per cent to Rs. 12,425 crore.

“The timely completion of the new SEZ refinery and the deep-water, oil and gas KG-D6 block and their safe and stable ramp up are noteworthy accomplishment for the company.

These projects have contributed meaningfully in RIL achieving a record level of profits despite the challenging business and economic environment. These projects will make a significant contribution in shaping the earnings of RIL and also play a vital role in changing the energy landscape in India,” said Mukesh D. Ambani, Chairman and Managing Director, while commenting on the results.

“Decline in prices accounted for 45.2 per cent reduction in revenue partially offset by higher volumes which accounted for 36.5 per cent growth in revenue,” RIL said in a release.

The operating profit before other income and depreciation increased by 7.9 per cent from Rs. 12,608 crore to Rs. 13,601 crore.

Net operating margin was higher at 17.4 per cent as compared to 14.6 per cent in the corresponding period of the previous year due to incremental share of oil and gas business, stronger petrochemical margins, base effect of lower turnover partially offset by softer margin environment in refining.

Other income was Rs. 1,337 crore against Rs. 377 crore due to higher interest income on account of higher cash and cash equivalents. Depreciation was higher by 77.7 per cent at Rs. 4,310 crore against Rs. 2,426 crore primarily on account of higher depreciation in oil and gas and refining and marketing business segments.

Interest cost was higher at Rs. 922 crore as against Rs. 731 crore. The gross interest cost was lower at Rs. 1,681 crore as against Rs. 2,326 crore for the corresponding period of the previous year on account of lower interest rates. Interest capitalised, during the period, was lower at Rs. 758 crore against Rs. 1,595 crore in the corresponding period of the previous year due to commissioning of the projects. The outstanding debt as on September 30, 2009, was Rs. 71,349 crore as compared to Rs. 73,904 crore as on March 31, 2009. RIL has cash and cash equivalents of Rs. 19,421 crore. These are in fixed deposits, certificate of deposits with banks and Government securities and bonds. The net capital expenditure towards projects for the period ended September 30, 2009, was Rs. 7,831 crore.

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