RIL net profit up 19 percent, tops estimate on refining margins

Fri Jul 19, 2013 7:29pm IST

India's Reliance Industries' KG-D6 facility located in Andhra Pradesh is pictured in this undated handout photo. REUTERS/Reliance Industries/Handout

India's Reliance Industries' KG-D6 facility located in Andhra Pradesh is pictured in this undated handout photo.

Credit: Reuters/Reliance Industries/Handout

Related Topics

Stocks

   

REUTERS - Higher margins from its core refining business helped energy conglomerate Reliance Industries(RELI.NS) post a third consecutive increase in quarterly profit, even as revenue from gas sales fell and output continued to decline.

Average gross refining margin rose to $8.4 per barrel for the June quarter compared with $7.6 in the same period last year, helping boost profits nearly 19 percent to a higher-than-expected 53.52 billion rupees.

Net sales fell 4.6 percent to 876.5 billion rupees while revenue from its oil and gas business fell 42 percent after weakening nearly 39 percent in the previous quarter.

Reliance, controlled by Mukesh Ambani, India's richest man, operates the world's biggest refining complex and derives nearly 80 percent of its revenue from refining. It was expected to post June quarter net profit of 52.7 billion rupees, according to Thomson Reuters I/B/E/S.

Reliance is poised to benefit from a recent government decision to double domestic gas prices from April 1, 2014, a measure the company had set as a precondition for any further investments in gas production.

Falling output at the company's key Krishna Godavari (KG) D6 field has capped revenues, but analysts said the price hike was likely to give Reliance, and partner BP Plc, an incentive to boost exploration and infrastructure spending.

Reliance said last month it would spend more than $26 billion over three years, much of it to bolster its refining, petrochemicals and exploration businesses, after coming under pressure from investors over its drive into telecoms and retail.

"In oil and gas, we have capex approval for 2013/14, which will allow us to do everything to stabilise production at D6," Alok Agarwal, joint chief financial officer told reporters.

"For any new development, it will take us at least three years to start production. It's a long cycle," he added.

Refining revenue during the June quarter fell marginally to nearly 816 billion rupees, while revenue from petrochemicals was almost flat at 219.5 billion rupees.

Other income, mainly treasury-related gains, accounted for 38 percent of pretax profit for the quarter. The company held cash reserves of $15.7 billion at June-end.

Shares in Reliance, India's second biggest company by market value, rose 0.7 percent ahead of the results. Its shares have gained 10 percent so far this year, outperforming a 3.7 percent rise in the Sensex.

(Additional reporting by Swati Pandey; Editing by Miral Fahmy)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Coal Block Allocation

Coal Block Allocation

Government urges Supreme Court to not cancel some 'illegal' coal mines  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit  Full Article 

Basel III Norms

Basel III Norms

RBI amends Basel III guidelines for banks  Full Article 

HSBC PMI

HSBC PMI

Factory activity expands at slower clip in August.  Full Article 

Current Account

Current Account

Balance of payments surplus for third straight quarter  Full Article 

India Infrastructure

India Infrastructure

RBI rule handicaps India's infrastructure hopes  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past  Full Article 

China Economy

China Economy

Retreat in China's PMIs heightens calls for policy easing.  Full Article 

Managing Share Sales

Managing Share Sales

Govt seeks bids from banks to manage PFC, REC share sales   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage