Committed to deploy cash flows
Nine months turnover up 33 per cent Reliance Retail operating 22 stores
MUMBAI: Reliance Industries Ltd (RIL) on Thursday reported a net profit of Rs. 8,055 crore for the nine months ended December 31, 2006, against Rs. 6,567 crore in the corresponding previous period, an increase of 23 per cent.
For the third quarter (October to December 2006), the net profit increased by 58 per cent to Rs. 2,799 crore from Rs. 1,776 crore. The EPS (earnings per share) during the quarter works out to Rs. 20.10 (Rs. 12.70).
Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, RIL, said: "It has been an excellent quarter for RIL. Our integrated and globally competitive business portfolio continues to help RIL de-risk its business model and deliver a superior operating performance. I am pleased with the launch of `Reliance Fresh,' Reliance's initiative in the organised retail sector that shall create a unique value proposition for the Indian consumer. RIL remains committed to deploying its cash flows in growing its existing and new businesses.''
The turnover for the nine months of the current fiscal was at Rs. 83,487 crore, reflecting a growth of 33 per cent over the corresponding period of the previous year. The increase in revenues reflects the impact of 17 per cent higher product prices and 16 per cent higher volumes. During this period, aggregate exports were higher by 123 per cent at Rs. 48,696 crore.
Consumption of raw materials increased by 41 per cent from Rs. 42,127 crore to Rs. 59,193 crore primarily on account of higher crude prices. Employee cost increased by 16 per cent from Rs. 763 crore to Rs. 888 crore. "This increase was mainly on account of performance linked incentives and increments. Reliance's employee cost as a percentage of turnover is at 1 per cent, which is very competitive when compared with its peer group globally."
"The margin was slightly lower due to higher raw material costs, primarily crude oil.'' Other income was lower at Rs. 108 crore against Rs. 596 crore "primarily on account of a fall in interest income due to utilisation of surplus funds for investment in Reliance Petroleum Ltd.''
Independent assessment of 2P reserves for the D1 and D3 discoveries in KGD6 is estimated at 11.3 trillion cubic feet (tcf), which is almost double the earlier estimate. The revised estimates of reserves have enhanced the production plateau from 40 million standard cubic feet a day to 80 mmscmd. RIL has submitted the commerciality proposal for the oil discovery in MA01 well of KGD6 and is awaiting regulatory approvals.
Reliance Retail opened its first store `Reliance Fresh' on November 3, 2006. A total of 22 retail stores were operational during the quarter.
In the nine months ended December 31, 2006, RIL incurred a capital expenditure of Rs. 5,099 crore as against Rs. 6,804 crore in the corresponding period of the previous year. With the completion of major expansion plans in the refining and petrochemicals business, the capital expenditure was largely for developing the potential exploration and prospecting initiatives.