RIL Q1 beats estimates, profit up 4.4%; GRM surges to $11.50/bbl

Its refining business delivered another record performance and achieved industry leading gross refining margin.

Gross refining margin surged to USD 11.50 a barrel for the quarter ended June 2016 from USD 10.8 a barrel in March quarter.

"Though regional refining margins trended downwards, our high-conversion refining system was able to take advantage of higher margins on middle distillates and wider discounts on sour crude oils," Mukesh Ambani said.

Profit was estimated at Rs 6,500 crore and gross refining margin at USD 9.8 a barrel for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Reliance said the benchmark Singapore complex margin averaged USD 5 a barrel in Q1FY17, declined compared to USD 7.7 a barrel in Q4FY16 on the back of weak light distillate cracks and sharp decline in fuel oil cracks. However, middle distillate cracks remained firm with recovery in gasoil cracks.

Operating profit (earnings before interest, tax, depreciation and amortisation) rose by 1 percent quarter-on-quarter to Rs 10,817 crore in Q1.

Refining income increased 21.4 percent sequentially to Rs 48,946 crore with its earnings before interest and tax (EBIT) showing 3.4 percent growth but margin declined 240 basis points.

Revenue from its petrochemical business came in at Rs 19,409 crore for the April-June quarter against Rs 19,548 crore in January-March period. Segment's earnings before interest and tax grew by 6.65 percent to Rs 2,901 crore and margin expanded by 100 basis points to 15 percent compared with preceding month.

PTA (purified terephthalic acid) and PET (polyethylene terephthalate) plants at Dahej, which were disrupted due to water shortage, are currently operating at full capacity, Reliance said, adding fibre intermediate production in Q1 was up 6 percent YoY to 1.5 million metric tonnes while polyester production remained stable at 0.51 million metric tonnes.

Its KG-D6 field produced 0.28 million barrels of crude oil and 28.05 billion cubic feet of natural gas in the quarter gone by, a reduction of 35 percent and 23 percent respectively year-on-year. Fall in oil and gas production was mainly on account of natural decline in the fields.

Panna-Mukta fields produced 1.7 million barrels of crude oil and 17.0 billion cubic feet of natural gas in Q1, an increase of 8 percent and 2 percent respectively on Y-o-Y basis. This was due to restoration of production from Mukta-A field, better than expected gains from work-overs of Panna-B wells and production coming from development of Mukta-B field, Reliance said.

Post cessation of production in Tapti in March 2016, the company handed over processing facilities and export pipelines to ONGC.

Retail business recorded continued growth momentum and strong profitability in Q1. Revenues grew by 45.8 percent YoY to Rs 6,666 crore, led by growth in digital, fashion & lifestyle and petroleum products. As on June 30, 2016, it operated 3,383 stores across 679 cities with an area of over 13 million square feet.

Reliance Jio Infocomm, which holds Pan-India unified licence and has total liberalised spectrum holdings of 846.10 MHz, now has over 1.5 million test users on its network. The test program will be progressively upgraded into commercial operations in coming months, the company said.

Reliance's consolidated net profit increased 2.4 percent sequentially to Rs 7,089 crore and revenue grew by 8.9 percent to Rs 64,990 crore in the quarter gone by.

Outstanding debt stood at Rs 1,86,692 crore as of June compared to Rs 180,388 crore as of March 2016, Reliance said, adding cash and cash equivalents were at Rs 90,812 crore compared to Rs 89,966 crore in same period.

Disclosure: Reliance Industries owns Network 18 that publishes Moneycontrol.com.