Reliance Q2 net up 1.5% to Rs 5,490 cr, GRM at $ 7.7/bbl

Moneycontrol Bureau

Reliance Industries' (RIL) second quarter (July-September) net profit grew 2.6 percent quarter-on-quarter (up 1.5 percent on yearly basis) to Rs 5,490 crore, supported by strengths in its petrochemical and refining businesses. A CNBC-TV18 poll had estimated that Reliance would report a net profit of Rs 5,400 crore. Net sales of the company rose 18.4 percent to Rs 1,03,758 crore in the September quarter, compared to Rs 87,645 crore in June quarter. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 11 percent quarter-on-quarter to Rs 7,849 crore, while its EBITDA margin declined 50 basis points QoQ to 7.6 percent during the quarter. Gross refining margin (GRM) stood at 7.7 percent in September quarter as against 8.4 percent in June quarter. Analysts had expected GRM at 7.8 percent. Earnings before interest and tax (EBIT) of its petrochemical business jump stronger-than-expected 32.6 percent Q-o-Q to Rs 2,504 crore, led by higher volumes, stable demand, improved deltas for key polymers (PP/PE) and fibre intermediates (PX/MEG), and favourable exchange rate movement, says company. Petrochem margin rose by 140 basis points sequentially to 10 percent in the quarter gone by. Refining EBIT increased 7.55 percent quarter-on-quarter (down 9.9 percent Y-o-Y) to Rs 3,174 crore during the quarter, which too was higher than analysts' forecast of Rs 2,930 crore. "Positively impacted by increased crude throughput, stable middle distillate and naphtha cracks, and favourable exchange rate movement." Deven Choksey, MD, KR Choksey Shares & Securities says, "EBIT performance for the refining segment is better comparatively, largely influenced because of the export driven refinery and the currency depreciation factor which had worked in their favour." Refining EBIT margin declined to 3 percent from 3.6 percent Q-o-Q. During the second quarter, Jamnagar refineries processed 17.7 MMT (highest ever quarterly throughput) of crude and achieved utilisation rate of 114 percent. However, oil & gas EBIT grew marginally to Rs 356 crore from Rs 352 crore Q-o-Q, which was far lower than analysts’ expectations of Rs 390 crore. During the September quarter:
1) RIL and BP announced a new gas condensate discovery off the east coast of India in the Cauvery basin.
2) RIL inked a memorandum of understanding with ONGC to explore the possibility of sharing RIL’s infrastructural facility in the East Coast.
3) RIL and its partners BP & NIKO announced a significant gas and condensate discovery in the KG-D6 block off the eastern coast of India. Retail business Retail business turnover rose 41 percent Y-o-Y to Rs 6,930 crore for the first six months of the financial year and jumped 31 percent on yearly basis to Rs 3,456 crore in second quarter. "The business operates 10 million sq. ft. of retail space with the addition of 58 stores across all formats. It now operates over 1,550 stores across 136 cities in India," the company said in its release. Reliance Jio Infocomm Reliance Jio Infocomm has received letter of intent (LoI) from Department of Telecommunication for award of unified licence with authorisation for all services under unified license in all service areas. Other income fell by 18.7 percent Q-o-Q to Rs 2,060 crore in July-September quarter. RIL is debt free on a net basis as on September 30, 2013. "We had cash and cash equivalents of Rs 90,540 crore," says company in its release.