Analysts, on average, had expected Reliance to report a profit of Rs5,874 crorerupees, according to Thomson Reuters data: Photo: AFP
New Delhi: Reliance Industries Ltd (RIL), operator of the world’s biggest oil-refinery complex, posted its biggest quarterly profit in seven years as earnings from refining crude increased.
Fourth-quarter net income rose 10.8% to Rs.6,240 crore in the three months ended 31 March from Rs.5,630 crore a year earlier, the Mumbai-based company said on Friday in a stock exchange filing. That beat the Rs.5,960 crore median of 16 analyst estimates compiled by Bloomberg. Sales fell to 41% to Rs.56,040 crore because of the slump in crude prices and gas output.
Higher profits will reinforce RIL’s plans to spend Rs.1.8 trillion to boost petrochemical-producing capacity, open retail stores and start phone services in the world’s fastest growing major market for smartphones. The company is banking on its refineries to increase profit and make up for lower natural gas output.
The producer operates two refineries with a combined capacity of 1.24 million barrels a day located next to each other at Jamnagar in Gujarat. The units have the ability to process cheaper, lower grades of crude into high-value products for use in Europe and the US.
RIL shares have declined 3.4% in the past year, compared with a 26% gain in the key S&P BSE Sensex. The loss of value has dislodged chairman Mukesh Ambani as India’s richest person, according to the Bloomberg Billionaires Index. The stock fell 0.2% to Rs.926.85 in Mumbai trading on Friday. The earnings were announced after the market closed.
RIL earned $10.1 for every barrel of crude it turned into fuels in the quarter, compared with $9.3 a year earlier and $7.3 in the three months ended December, the company said.
Profit from making diesel in Singapore, an Asian benchmark, averaged $15.52 a barrel in the quarter ended 31 December, compared with $17.86 a year earlier and $15.57 a barrel in the preceding three months, according to data from PVM Oil Associates Ltd in London.
The company produces natural gas from the KG-D6 block off India’s east coast with partners BP Plc., Europe’s second-biggest oil company, and Canada’s Niko Resources Ltd. Output from the field has been falling since the middle of 2010 as RIL says the field is more difficult to produce from than initially thought.
Natural gas output from KG-D6 fell 5% to 36.5 billion cubic feet in the quarter from the previous three months, RIL said. Oil production from the block fell 3% to 500,000 barrels and condensate output decreased 0.4% to 100,000 barrels.
RIL, which also operates stores that sell fruits and clothes, will start a $12 billion telecommunications network this year to meet voice and data demand in the world’s second- most populous nation, Ambani told shareholders in June. Bloomberg
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