RIL establishes corporate record, Q1 net exceeds Rs. 600 cr.

MUMBAI, JULY 20. Reliance Industries has declared a net profit of Rs. 612 crores for the quarter ended June 30, 2000, against Rs. 510 crores in the corresponding period last year, up 20 per cent.

Sales during the quarter were Rs. 6,615 crores against Rs. 3,837 crores, an increase of 72 per cent. The operating profit increased by 37 per cent to Rs. 1,235 crores from Rs. 901 crores. Cash profit increased to Rs. 937 crores from Rs. 717 crores, an increase of 31 per cent.

Other income decreased by 48 per cent to Rs. 78 crores owing to lower interest income as a result of reduction in foreign currency monetary assets and conversion of optionally fully convertible debentures of Reliance Petroleum into equity. Earnings per share (EPS) for the quarter are Rs. 5.8 and cash earnings per share (CEPS) Rs. 8.8. Annualised EPS is Rs. 23 and CEPS Rs. 35.4.

Announcing the quarterly financial performance of Reliance Industries, Mr. Anil Ambani, Managing Director, said ``We expect to establish new records for the full year, by crossing our targeted production volumes of 10 million tonnes and enhancing our leading market share positions in all our major products.'' All plants of Reliance Industries, including the new plants operated at rated capacity throughout the first quarter, leading to all time record production volumes of 2.63 million tonnes. The company would achieve its production target through acquisitions and maximisation of capacity utilisation at the present facilities. He said the company could achieve record performance by price growth, volume growth and focus on specialty products.

Reliance is the first private sector company to declare a net profit of over Rs. 600 crores, establishing a new corporate record. Mr. Ambani said this was the 41st quarter of Reliance declaring profits showing ``consistency in performance''. Mr. Ambani added ``We are encouraged by the fact that Reliance has achieved another quarter of strong financial performance, in a period where operating margins came under pressure as a result of consistently higher feedstock costs.'' This is in reference to the high crude oil prices which were quoted as high as $31.9 a barrel and are now ruling at $28.56 a barrel. The lowest price was $9.6 and it may continue at $25 a barrel in the current year.

RIL emerges as India's largest manufacturer exporter which has grown by 50 times in five years. In the first quarter, total exports including deemed exports increased by over eight times to Rs. 1,311 crores from Rs. 156 crores in the corresponding period last year. This includes Rs. 479 crores towards merchant exports of petroleum products. ``This is reflecting our global competitiveness and the international quality of our products,'' said Mr. Ambani, adding, ``our export revenues are likely to be nearly $1 billion in the current financial year.''

Further Mr. Ambani said ``We intend to deploy our increasing cash flows for creation of world class assets, in our existing businesses and the new infocom landscape, with the objective of consistently enhancing overall shareholder value.'' He said the new company ``Reliance Infocom'' will take initiatives for capturing new opportunities and it will deliver superior returns to the investors.

On Reliance's open offer for BSES, Mr. Ambani said the company acquired 11.86 per cent BSES shares from retail and institutional (other than financial institutions) investors which makes its total stake in BSES to 27 per cent. RIL has the option to acquire an additional five per cent stake in BSES each year under the creeping acquisition route. ``This consolidation will add about Rs. 100 crores to Reliance Industries income statement,'' Mr. Ambani added.Mr. Ambani said the company will also consolidate Reliance Petroleum under its own income statement from the next financial year. The promoters have increased their stake in Reliance Industries to 40 per cent through the creeping acquisition route. The promoters have the option to pick up another five per cent by the year-end which would take up their holding to 43 per cent. Further, the voting rights on GDRs of seven per cent vested with the management gives the promoters a 51 per cent control over Reliance Industries.