Reliance Industries: Lower gas output, GRM hit FY12, net profit down 21% YoY

Moneycontrol Bureau

Petrochemical and oil & gas giant Reliance Industries’ fourth quarter net profit fell 21% year-on-year to Rs 4236 crore, weighed down by lower gas output and weak refining margins. A two-fold jump in other income and lower tax outgo helped cushion a further decline in net profit. Revenues for the quarter rose 16.7% y-o-y to Rs 87,833 crore.

The reported numbers were not much different from what the analysts community was expecting. A CNBC-TV18 poll estimated quarterly net profit at Rs 4,300 crore and revenues at Rs 84300.

Oil and gas revenues fell 36.5% y-o-y, and though revenues in the refining and petrochemical segments rose 17.7% and 14% respectively, margin pressures caused operating profits to decline. 

Meanwhile, have a look at the company's segment performance during FY12, YoY

Oil & Gas
Net sales Rs12898 crore versus Rs 17250 crore, down 25.2% YoY
EBIT margin: 40.7% versus 36.8%, y-o-y

The company said gas production from its KG-D6 basin was adversely impacted due to water/sand ingress. But going forward, the company along with its technical partner BP is working on an integrated plan to improve output from the field.

Refining and marketing
Net sales Rs 294736 crore versus Rs 215431 crore, YoY
EBIT margin 3.3% versus 4.3%
GRM $8.6/bbl versus $8.4/bbl

The company processed 67.8 million tons of crude during the year and had an average utilization rate of 109% which was higher then 83.3% in North America and 76.8% in Europe.

Petrochemical business
Net Sales Rs 80626 crore versus 63155 crore, YoY
EBIT margins 11.1% versus 14.7%, YoY
While the company’s polyester and Fiber intermediaries saw demand go up by 25 and 5% during the year, Polypropylene, which is largest part of RIL’s polymer portfolio saw its margins decline.

RIL's market value tumbled by a third in 2011 on worries of falling output from its gas fields hurting growth. Ahead of the result announcement, shares in Reliance ended down 1.5 % to Rs 730.85,  while the Sensex fell 0.7%.