RIL O2C Q2 results: Revenue rises 3.2% to Rs 1.60 lakh crore, EBITDA up 21%

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Reliance Industries Ltd’s oil-to-chemicals business posted a 3.2 percent rise in revenue to Rs 1.60 lakh crore in the September quarter, led by the addition of 236 outlets to the Jio-BP fuel retail network.

The segment’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) increased by 21 percent from a year earlier to Rs 15,008 crore due to a sharp rebound in transportation fuel cracks, favourable polymer margins, the company said.

Chairman and Managing Director Mukesh D. Ambani said said the O2C business delivered robust growth despite continued volatility in energy markets.

"Fuel margins recovered over the previous year, led by middle distillate cracks. Downstream chemicals continue to be impacted by overcapacity. Corrective steps by the industry stakeholders will help balance global downstream markets in the medium term. Reliance’s operational delivery is supported by integrated assets, a high mix of light-feed cracking, including a virtual ethane pipeline from the US, and a strong focus on domestic markets," Ambani said.

The company said the O2C business delivered its highest-ever quarterly throughput at 20.8 million tonnes, up 3 percent from a year earlier, supported by sustained high utilisation at its Jamnagar refinery, stronger domestic fuel demand and a sharp recovery in transportation fuel margins.

However, the quarter specifically saw a 2 percent decline in domestic demand for aviation turbine fuel. Srinivasan T, Chief Operating Officer, O2C (Refining) said the reason behind this was flight disruptions along with aircraft downtime due to maintenance. "After the aeroplane crash in Ahmedabad, all airlines became extra cautious and there were more checks, which is why aviation fuel demand was down during the quarter," he said.

Srinivasan T said Reliance BP Mobility Ltd (Jio-BP) saw continued traction in its downstream retail operations, with high-speed diesel sales up 34.2 percent and motor spirit sales up 32.5 percent from a year earlier— significantly outperforming industry averages. The network now comprises over 2,000 fuel outlets and 6,400 EV charging points across the country.

Amit Chaturvedi, President, Petrochemicals, said the floods in Punjab and other areas of northern India affected the company's Polyvinyl Chloride (PVC) business. He said the demand is bouncing back for polymers and polyesters after the GST rate rationalisation came into effect from September 22.

The oil-to-chemicals segment of RIL includes refining, petrochemicals, fuel retailing, aviation fuel and bulk wholesale marketing. It includes a large portfolio spanning transportation fuels, polymers, polyesters and elastomers.

Oil and Gas business

The oil and gas segment recorded EBITDA of Rs 5,002 crore, down 5.4 percent from a year earlier, with margins at 82.6 percent, lower by 240 basis points. The decline was due to lower revenues and higher operating costs arising from periodic maintenance activity.

The company said KGD6 sales volumes fell due to the natural decline in gas production, while lower CBM gas and crude price realisations also impacted earnings. The effect was partially offset by improved gas price realisation for KGD6 and higher coal bed methane (CBM) volumes. Average KGD6 gas production was 26.1 MMSCMD, with oil and condensate output of about 18,746 barrels per day, it said.

Srinivasan T said average Brent crude prices fell 14 percent YoY due to OPEC+ accelerating its rollback of production cuts and signalling additional output hikes. He added that gas oil cracks increased, driven by Ukrainian attacks on Russian refineries, which curbed diesel supply.

He said Reliance would continue to augment oil and gas production with a focus on increasing output from its KGD6 block, while further expanding exploration across the East coast.

The oil and gas segment includes exploration, development, production of crude oil and natural gas.

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