Reliance Industries today posted 4.4 per cent rise in first-quarter consolidated net profit to Rs 6,222 crore, while standalone profit grew 12 per cent to highest level in over six years beating market estimates.
The standalone net profit stood at Rs 6,318 crore in the April-June quarter, up from Rs 5,649 crore in the year-ago period, on six-year high refining margins and strong petrochemicals earnings.
Reliance Industries Ltd (RIL), the operator of world's largest refining complex that can process low-grade crude and switch between fuels depending on market prices, earned USD 10.4 on turning every barrel of crude into petroleum product.
This was the highest gross refining margin it has earned in six years as compared to USD 10.1 per barrel margin in preceding January-March quarter and USD 8.7 of Q1 of 2014-15 fiscal.
The company, which is investing USD 12 billion to boost petrochemical capacity and refinery processes as well as build facilities to import ethane from US, said a 23 per cent dip in its turnover to Rs 83,064 crore was mostly because of 43.5 per cent dip in oil prices.
Before the earning announcement, RIL shares fell 1.9 per cent to close at Rs 1,025.05 on the BSE.
Consolidated net profit rose 4.4 per cent to Rs 6,222 crore in April-June quarter of the current fiscal as opposed to Rs 5,957 crore a year ago, the statement said.
Chairman Mukesh Ambani said financial performance reflects the benefits of integrated hydrocarbon chain activities in a benign oil price environment.
"The sharp increase in demand for transportation fuels helped us realise strong refining margins," he said.
Oil product demand globally is estimated to have grown at about 1.6 million barrels per day, resulting in high refinery runs across all regions.
"Our petrochemicals business recorded a strong quarterly performance supported by high operating rates and margin strength in the ethylene chain," he said.
Going forward, RIL is committed to accelerating the growth of operating EBITDA, he said.
While pre-tax profit from refinery business jumped 37.7 per cent to Rs 5,252 crore, earnings from petrochemical business soared 25.5 per cent to Rs 2,338 crore.
EBIT from oil and gas production business however dropped 97 per cent to Rs 32 crore.
"We are leveraging the strength of our integrated value chains to deliver sustainable growth. Large investments in our petrochemicals and refining businesses are based on advantaged feedstocks to enable us to stay among low-cost, competitive producers in an evolving hydrocarbon chain environment.
"We maintained rapid progress in project construction activity at Jamnagar. The company's world-scale petcoke gasification project and ethylene cracker are on track for planned start-up in 2016. We are also in the final lap of launch of our Jio services which will bring about a positive transformation in the lives of millions of Indians," Ambani said.
Other income fell to Rs 1,832 crore in April-June from Rs 1,974 crore. Depreciation of Indian rupee led to increase cost jumping to Rs 902 crore as against Rs 505 crore in Q1 of previous fiscal.
RIL's outstanding debt was higher at Rs 170,814 crore as on June 30, 2015 when compared to Rs 160,860 crore as on March 31, 2015.
It had a cash balance of Rs 87,391 crore.
Lower oil prices meant earnings from refinery business fell 30 per cent to Rs 68,729 crore but segment pre-tax profit was up 37.7 per cent at Rs 5,252 crore.
During the quarter, RIL's Jamnagar refineries processed 16.6 million tonnes, which translates into 107 per cent of the installed capacity.
Singapore refining margin in the first quarter was USD 8 per barrel.
Petrochemical business revenue was down 18 per cent at Rs 20,858 crore but segment pre-tax profit was up 25.5 per cent to Rs 2,338 crore, primarily on account of increase in prices.
US shale gas revenue fell 47.2 per cent to Rs 854 crore and the company posted a pre-tax loss of Rs 49 crore.