Backed by strong performance of its refining and petrochemicals business, Reliance Industries (RIL) reported consolidated net profit rose 12.5 per cent to Rs.6,720 crore in the quarter ended September 30, from Rs.5,972 crore in the same period last year despite a 34 per cent fall in sales.
During the period, RIL’s sales declined to Rs.75,117 crore from Rs.1,13,396 crore a year earlier, tracking the fall in global crude oil prices. “The decline in revenue was led by the 50.6 per cent year-on-year decline in benchmark (Brent) oil price,” the company said.
“We achieved record levels of earnings before interest, taxes, depreciation and amortisation (EBITDA) and profits for the quarter, underscoring our ability to optimally utilise our assets across the value chain,” Mukesh D. Ambani, Chairman and Managing Director, said in a statement. “Refining business performance was notable, as it benefited from a combination of high utilisation levels, advantageous crude market opportunities and strong global fuels demand,” he added.
While the performance of RIL’s exploration and production business was adversely impacted, its refineries, working overtime due to growth in the demand for gasoline and diesel, yielded satisfactory results.
The company achieved a gross refining margin (GRM) of $10.6/bbl, the highest in seven years, as compared with $8.3/bbl in the same period last year.
The company’s Jamnagar refineries witnessed average utilisation of 110 per cent reflecting rising global oil demand, which is expected to grow at 1.8 million barrels a day in 2015 as compared with 0.8 million barrels a day last year.
RIL said its premium over Singapore complex margins widened to $4.3/bbl during the quarter, the highest level since early 2009.
During the quarter the company’s KG-D6 field produced 0.39 mmbbl of crude oil and 37 BCF of natural gas, a reduction of 24 per cent and 9 per cent respectively.
“The fall in oil and gas production was mainly on account of natural decline in the fields,” the company said.
In the absence of viability and uncertainty involving the KG fields and pricing the company is not making any additional investment in these fields, a senior official said.
The U.S. shale gas operations of the company remained challenging due to overall macro environment, company officials said adding that during the quarter the company had made a provision for impairment of $637 million in shale gas assets held by Reliance Holdings USA.
“Petrochemicals segment performance reflects strong volume growth, product mix improvement and lower energy costs,” Mr. Ambani said adding “Reliance Retail achieved a milestone of Rs.5,000 crore quarterly turnover mark for the first time, reflecting continuing growth momentum in physical retailing.”
