RIL net profit drops 22 %

Special Correspondent

Commissions large refinery and completes gas projects

Turnover increases by 8.3 % to Rs. 150,771 crore

Sets up global benchmarks for project execution

MUMBAI: Reliance Industries Ltd (RIL) on Thursday reported a net profit of Rs. 15,279 crore in 2008-09, down by 21.5 per cent compared to Rs. 19,458 crore in the previous year.

“The profit after tax, excluding exceptional item, was Rs. 15,607 crore, an increase of 2.3 per cent. The profit after tax, including exceptional item, was Rs. 15,279 crore as against Rs. 19,458 crore. Exceptional item represents provision of Rs. 370 crore in the quarter ended March 31, 2009, towards estimated claims on account of subsidiaries.” RIL stated.

Basic EPS (earnings per share), excluding exceptional item, for the year was Rs. 103.2 against Rs. 105. Basic EPS, including exceptional item, was Rs. 101.

The turnover increased by 8.3 per cent to Rs. 150,771 crore from Rs. 139,269 in the previous year.

Exports improved by 12.6 per cent to Rs. 94,038 crore. However, “the net profit before exceptional item increased by 2.3 per cent to Rs. 15,607 crore” compared to Rs. 15,261 crore in the previous year, RIL stated.

Transformational year

Commenting on the results, RIL Chairman and Managing Director Mukesh D. Ambanisaid: “This was a transformational year for Reliance. We commissioned our large refinery and substantially completed gas development projects. We have set new global benchmarks for project execution.

“Our operating performance with earnings growth is creditable in a year of extraordinary challenges of price volatility and demand reduction.”

The operating profit before other income and depreciation remained flat at Rs. 23,395 crore as against Rs. 23,306 crore in the previous year. Net operating margin for the year was lower at 15.5 per cent as compared to 16.7 per cent in the previous year due to a softer margin environment in both petrochemicals and refining. Upstream margins however, were better due to enhanced realizations from both oil and gas.

Other income was at Rs. 2,033 crore as against Rs. 895 crore due to higher interest income on account of higher cash and cash equivalents and gain on sale of investments. Depreciation was higher by 4.4 per cent at Rs. 5,059 crore against Rs. 4,847 crore in the previous year primarily on account of higher amortisation in the oil and gas segment. Interest cost was higher at Rs. 1,692 crore as against Rs. 1,077 crore primarily on account of increased borrowings during the year. Interest capitalised, during the year was Rs. 2,532 crore as against Rs. 885 crore in the previous year.

The outstanding debt as on March 31, 2009, was Rs 53,457 crore compared to Rs. 36,480 crore as on March 31, 2008.

RIL has cash and cash equivalents of nearly Rs. 25,000 crore. “These are in fixed deposits, certificate of deposits with banks and Government securities and bonds.” RIL’s net debt was approximately equivalent to 1.1 times profit before depreciation and interest charges for the year.

Capital expenditure

Capital expenditure towards projects including interest capitalisation for the year was Rs. 24,907 crore. RIL has domestic credit ratings of AAA from CRISIL and FITCH. Moody’s and S&P have reaffirmed investment grade ratings for international debt of RIL, as Baa2 and BBB, respectively.

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