RIL said it maintained a significant premium over Singapore complex margins due to product yield optimisation and robust risk management.
Reliance Industries, the country's largest company by market capitalisation, reported a consolidated profit after tax of Rs 10,104 crore for the June quarter, up 6.8 percent from a year ago. The net profit also beat a poll of analysts conducted by CNBC-TV18 which had pegged the profits at Rs 9,852 crore. The profit tax, however, was down 2.5 percent when compared to the March quarter number of Rs 10,362 crore.
Consolidated net revenue grew by 13.2 percent from a quarter ago to Rs 1.57 lakh crore, which was much higher than CNBC-TV18 poll estimates of Rs 1.43 lakh crore. On a year-on-year basis, consolidated profit grew 22 percent.
"First quarter earnings were strong despite weak global macroeconomic environment and challenging hydrocarbon market conditions," Mukesh D. Ambani, Chairman and Managing Director said.
"Downstream businesses delivered resilient performance in an environment of slower demand growth and incremental supplies. The performance reflects the benefits of deep refining and petrochemicals integration, chain economics and feedstock flexibility," he added.
Earnings on most parameters beat analyst estimates barring gross refining margin, which came in at $8.10 a barrel for the quarter (the lowest level since Q3FY15) against Street expectations of around $8.50 a barrel.
RIL said it maintained a significant premium over Singapore complex margins due to product yield optimisation and robust risk management. The GRM was $8.2 a barrel in Q4FY19 (outperforming Singapore complex margins by $4.6 a barrel) and $10.5 a barrel in Q1FY19.
At the operating level, consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 2.3 percent quarter-on-quarter to Rs 21,315 crore but margin contracted 1.42 percentage points sequentially to 13.6 percent in the June quarter. The CNBCTV18-poll had pegged EBITDA at Rs 20,894 crore. The year-on-year increase in EBITDA was 3.16 percent and the margin in the June quarter last year was 16.05 percent.
The refining business, which contributed 64 percent to total revenue, increased by 15.8 percent sequentially to Rs 1.01 lakh crore driven by higher volumes. Operating income grew 3.8 percent sequentially, but margin contracted 59 bps.
Reliance reported a 11.3 percent sequential decline in its petrochemical revenues to Rs 37,611 crore for the quarter. Segment operating income fell 5.9 percent sequentially, but margin expanded 130bps.
"Revenue from the petrochemicals segment decreased by 6.6 percent YoY due to decrease in volumes and price realisations primarily in paraxylene (PX) and monoethylene glycol (MEG) which was partially offset by increase in volumes of polyesters," RIL said.
In the telecom business, Reliance Jio registered a healthy growth with profit growing 6.1 percent sequentially to Rs 891 crore. It also reported a subscriber base of 331.3 million in the first quarter against analyst expectations of 306.7 million. The subscriber base was 332.5 million in the quarter ended March 2019.
Jio revenue grew by 5.2 percent quarter-on-quarter to Rs 11,679 crore in the June quarter. Segment operating income rose 8.2 percent sequentially and segment margin expanded 110bps.
"The company continues to make major strides in its retail and digital services businesses led by focus on growth markets with offerings in the right product segments and compelling value proposition. Our digital services business continues to transform the mobility market in India while scaling newer milestones," Ambani said.
Reliance Retail also registered a 4.2 percent sequential growth in net revenues to Rs 38,196 crore. Its EBITDA rose 6.5 percent and margin expanded 12 bps quarter-on-quarter.
Reliance Industries said its outstanding debt as of June 2019 was Rs 2.88 lakh crore, little changed from the end of March 2019.
Separately, RIL said that BIF IV Jarvis India Pte Limited, an affiliate of Brookfield Asset Management, has agreed to invest Rs 25,215 crore in the units proposed to be issued by the Tower Infrastructure Trust.
Reliance Industrial Investments and Holdings Limited (RIIHL), a wholly-owned subsidiary of Reliance Industries, is the sponsor of the Trust. The Trust currently holds 51 percent stake in Reliance Jio Infratel Private Limited to which the tower assets undertaking of Reliance Jio Infocomm was transferred as a going concern.
Reliance said proceeds from the investment by Brookfield will be used to repay certain existing financial liabilities of Reliance Jio Infratel and acquiring the balance 49 percent of equity share capital of Reliance Jio Infratel, currently held by RIL.Disclaimer: Reliance Industries Ltd is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .