Oil and gas giant Reliance Industries Ltd (RIL) reported consolidated net profit of ₹7,113 crore in the first quarter of this fiscal, up 18.1 per cent from the corresponding period last year. Revenue fell 13.4 per cent year-on-year to ₹71,451 crore due to a 26 per cent decline in benchmark Brent crude oil prices.
However, RIL capitalised on better refining margins and discounted prices on cheaper sour crude oils to prop up profitability.
The quarter’s gross refining margin (the difference between the cost of crude oil and the average price of refined products) was $11.5 a barrel, which outperformed the Singapore complex margins by $6.5 a barrel.
The June quarter results are in line with the new Ind AS accounting standards, which apply to companies with a net worth in excess of ₹500 crore this fiscal.
The new rules impact the calculation of revenue, profits and net worth; for RIL, however, the net impact is minimal.
The Q1 FY16 net profit under the previous accounting rules was ₹6,222 crore; restated under Ind AS, it fell marginally to ₹6,024 crore.
Under the restated accounts for the current quarter, gross debt on June 30 was ₹1,86,692 crore, and net debt about ₹96,000 crore.
Capital expenditure for the quarter was ₹26,690 crore, principally on account of the expansion of the petrochemicals and refining business at Jamnagar, Dahej and Hazira, shale gas projects in the US and the yet-to-be-launched digital services arm, Jio. “We’re reaching the peak of our capex cycle,” V Srikanth, Joint CFO, told journalists, committing to $9 billion (₹60,000 crore) as capex this fiscal.
Revenues from all segments of the business fell this quarter compared to a year ago. In refining and marketing segment, revenue fell 17.7 per cent to ₹56,568 crore and 0.7 per cent in the petrochemicals business to ₹20,718 crore because of lower product prices.
The exploration business reported a consecutive quarterly earnings loss; organised retail, which operates the Reliance Retail chain, was a bright spot, growing 45.8 per cent to ₹6,666 crore in quarterly segment revenue.
Of the over-1,000 retail fuel outlets that RIL has across the country, the 361 company-owned and operated ones will be clubbed with the retail segment, starting this quarter.
Jio: no launch date yet RIL said it has 1.5 million test users on Reliance Jio’s network, but gave no date for its commercial launch.
In a falling stock market on Friday, RIL’s shares closed half a percentage point down at ₹1,012.55 on the BSE.