Reliance Industries (RIL) reported its results for the quarter ended September post market hours on Friday which was a mixed bag but that will not be a show stopper for the oil & gas major.
The market is likely to view the results positively. The markets will open on a positive note on Monday, said SP Tulsian of sptulsian.com.
Ahead of the results, RIL closed 0.4 percent higher at Rs 876.70. It hit a low of 874.25 and a record high of Rs 891 in trade on Friday.
“Our Company reported another quarter of robust performance. I am delighted to share that this includes the financial performance of Reliance Jio which had a positive EBIT contribution in its first quarter of commercial operations,” Mukesh D Ambani, Chairman and Managing Director, Reliance Industries Limited.
“The results also reflect strong underlying fundamentals of our refining and petrochemicals businesses. Sustained demand growth coupled with supply disruptions further tightened demand-supply balances globally during the quarter,” he said.
We have collated a list of top ten takeaways from RIL Q2 results:
Net Profit
RIL reported 12.5 percent year-on-year (YoY) increase in net profit of Rs 8,097 crore for the quarter ended September which was slightly lower than a CNBC-TV18 poll of Rs 8,169 crore.
The oil & gas major reported a net profit of Rs 7,209 crore in the corresponding quarter of last fiscal. The net profit fell by nearly 11 percent on a sequential basis.
Total Revenues
Total revenues rose 23.9 percent on a YoY basis to Rs 1,01,169 crore for the quarter ended September which was higher than a CNBC-TV18 poll of Rs 85,260 crores. Total revenues rose 11.7 percent on a sequential basis.
Increase in revenue is primarily on account of increase in prices and volumes in refining, petrochemical and retail businesses. Further, the consolidated revenues reflect the commencement of commercial operations of RJIL’s Wireless Telecommunication Network during the quarter.
Operating Performance
Operating profit before other income and depreciation increased by 39.4 percent to Rs 15,565 crore (USD 2.4 billion) from Rs 11,164 crore in the corresponding period of the previous year.
The strong operating performance was driven by the refining, petrochemicals, retail businesses and positive contribution from digital services starting from this quarter.
Total Debt on books
Outstanding debt as on September 30, 2017 was Rs 214,145 crore (USD 32.8 billion) compared to Rs 196,601 crore as on March 31, 2017.
Jio's loss at Rs 270.60 crore
Reliance Jio has posted a net loss of Rs 270.6 crore against a loss of Rs 21.3 crore in previous quarter. Revenue for the quarter stood at Rs 6,147.06 crore.
The loss was much lower than analysts’ estimates that were at around Rs 2,000 crore. Jio's EBITDA for the quarter stood at Rs 1,442 crore and margin at 23.45 percent.
Cash on Books
Cash and cash equivalents as on 30th September 2017 were at Rs 77,014 crore (USD 11.8 billion) compared to Rs 77,226 crore as on 31st March 2017. These were in bank deposits, mutual funds, CDs, Government Bonds and other marketable securities.
Capital Expenditure
The capital expenditure for the quarter ended September 30, 2017 was Rs 15,653 crore (USD 2.4 billion) including exchange rate difference capitalisation.
Capital expenditure was principally on account of ongoing projects in the petrochemicals and refining business at Jamnagar and digital services business.
Refining & Marketing Business
The 2Q FY18, revenue from the Refining and Marketing segment increased by 15.3 percent on a YoY basis to Rs69,766 crore ($ 10.7 billion). Segment EBIT increased by 10.8 percent YoY to Rs6,621 crore ($ 1.0 billion), aided by higher volumes and strong transportation fuel cracks.
Gross Refining Margins
Gross Refining Margins (GRM) for 2Q FY18 stood at a nine-year high of $ 12.0/bbl as against $ 10.1/bbl in 2Q FY17. RIL’s GRM outperformed Singapore complex margins by $ 3.7/bbl.
RIL’s GRM outperformed Singapore complex margins by $ 3.7/bbl. Improved product cracks led by demand growth and supply disruptions helped in improving refining margin despite narrow light-heavy differential for crude oil and widening of Brent-Dubai differential
Petrochemicals Business
The 2Q FY18, revenue from the Petrochemicals segment increased by 24.9 percent YoY to Rs27,999 crore ($ 4.3 billion) due to higher volumes in the polyester chain and firm prices.
Petrochemicals segment EBIT was at a record level of Rs4,960 crore ($ 760 million) supported by strong volume growth, higher margins and improved product mix with ethane cracking stabilizing at Dahej and Hazira. EBIT margins during the quarter expanded to 17.7%, highest in the last ten years.
Oil & Gas Exploration
2Q FY18 revenues for domestic E&P operations was at Rs760 crore up 8.4% YoY due to the commencement of CBM production. Revenues also include Rs198 crore received towards the settlement of various long pending commercial issues relating to the sale of crude oil of Panna-Mukta Field.
KG-D6 block produced 0.18 MMBBL of crude oil and 17.7 BCF of natural gas in 2Q FY18, a reduction of 31% and 30% respectively on a Y-o-Y basis. Condensate production in 2Q FY18 was at 0.01
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd
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