Moneycontrol
Oct 14, 2017 10:59 AM IST | Source: Moneycontrol.com

RIL Q2 net up 13%, EBITDA beats estimates; GRM at 9-yr high, Jio loss at Rs 271cr

Operational performance was far better than analysts' expectations, with the EBITDA at Rs 15,565 crore with margin at 16.4% in Q2

Moneycontrol News

Oil-to-telecom major Reliance Industries has reported consolidated profit at Rs 8,097 crore for the quarter ended September 2017, a growth of 12.8 percent compared to year-ago quarter but registered a 10.8 percent decline from previous quarter. Numbers except bottomline beat analysts’ expectations.

Revenue from operations grew 5 percent sequentially and 16.5 percent year-on-year to Rs 95,085 crore in second quarter of FY18, driven by growth across segments - petrochemical, refining, organised retail and digital businesses.

"Another quarter of robust performance includes the financial performance of Reliance Jio which had a positive EBIT contribution in its first quarter of commercial operations," Mukesh Dhirubhai Ambani, Chairman and Managing Director, Reliance Industries said.

The results also reflected strong underlying fundamentals of refining and petrochemicals businesses, he added.

Operational performance was far better than analysts' expectations, with the EBITDA (earnings before interest, tax, depreciation and amortisation) growing 24 percent sequentially (up 39.4 percent YoY) to Rs 15,565 crore and margin rising 300 basis points quarter-on-quarter to 16.4 percent in quarter ended September 2017.

Petrochemical business registered a 10 percent growth QoQ or 24.9 percent YoY at Rs 27,999 crore, with EBIT (earnings before interest and tax) growing 23 percent QoQ and 45.2 percent YoY at 4,960 crore. Margin expanded by 190 basis points sequentially and 247 bps year-on-year to 17.7 percent in quarter gone by, the highest in last 10 years.

"Petrochemicals segment EBIT was at a record level supported by strong volume growth, higher margins and improved product mix with ethane cracking stabilising at Dahej and Hazira," the company said.

Revenue from its refining business increased 4.2 percent QoQ and 15.3 percent YoY to Rs 69,766 crore. Segment's EBIT declined 11.4 percent sequentially to Rs 6,621 crore as Q1FY18 numbers included exceptional item of Rs 1,087 crore; but year-on-year the growth was 10.8 percent.

Gross refining margin for the quarter came in at USD 12 per barrel, which was slightly below analysts' estimates but still at 9-year high. GRM outperformed Singapore complex margins by USD 3.7 a barrel, Reliance said.

Refining margin was at USD 11.9 a barrel in previous quarter and analysts’ estimates were at USD 12.5 a barrel for Q2.

Consolidated profit was estimated at Rs 8,169 crore on revenue of Rs 85,260 crore and EBITDA at Rs 13,178 crore with margin of 15.4 percent for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Apart from its oil business, the street closely looks at its digital business, which analysts expect it show better performance going ahead.

Ambani said the strong financial results of Jio demonstrated the robust business model of Jio and the significant efficiencies that the company has built through its investment in the latest 4G technology and right business strategy.

Reliance Jio has posted a net loss of Rs 270.6 crore in July-September quarter against loss of Rs 21.3 crore in June quarter, which was much lower than analysts’ estimates that were at around Rs 2,000 crore.

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Jio's revenue for the quarter stood at Rs 6,147.06 crore and EBITDA stood at Rs 1,442 crore with margin at 23.45 percent. Average revenue per user was at Rs 156 per subscriber per month, which analysts feel more or less looked positive.

Subscriber base was at 13.86 crore at the end of September 2017, with net addition of 1.53 crore during the quarter, Reliance said, adding total wireless data traffic during the quarter at 378 crore GB.

Meanwhile, retail business showed a whopping growth of 26.6 percent QoQ and 81.3 percent YoY at Rs 14,646 crore for September quarter, with EBIT growing 14.4 percent QoQ and 106.2 percent YoY at Rs 334 crore. The growth was driven by digital, fashion & lifestyle and petroleum products.

During the quarter, Reliance said Retail added 45 stores across various store concepts, taking the total number to 3,679 stores across 750 cities.

On standalone basis, Reliance's profit increased 0.8 percent sequentially to Rs 8,265 crore and revenue rose 1.9 percent to Rs 71,761 crore in Q2.

On sequential basis, outstanding debt increased 6.7 percent to Rs 2,14,145 crore in quarter ended September 2017, but cash and cash equivalents increased 6.8 percent to Rs 77,014 crore.

Finance cost more than doubled sequentially to Rs 2,272 crore from Rs 1,119 crore due to finance cost related to digital services business.

Reliance said capital expenditure for the quarter stood at Rs 15,653 crore, which was principally on account of ongoing projects in petrochemicals and refining business at Jamnagar and digital services business.

The stock price of Reliance Industries which announced earnings after market hours, closed up 0.48 percent at Rs 876.70. It hit a fresh record high of Rs 891 intraday today. It rallied 62 percent in 2017.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

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