RIL June quarter profit jumps 18% to Rs 7,113 cr

  • HT Correspondent, Mumbai
  • Updated: Jul 15, 2016 18:24 IST
A Reliance Industries Ltd construction site in Mumbai (Reuters)

Mukesh Ambani-led Reliance Industries Ltd (RIL) on Friday posted a 18.1% rise in its first quarter net profit to Rs 7,113 crore, against Rs 6,024 crore in the year-ago period, due to higher gross refining margins.

Revenue in the same period, however, fell 13.4% to Rs 71,451 crore against Rs 82,509 crore during the same period previous year. The slide in revenue was due to the 26% decline in benchmark oil (Brent) price, which averaged at $45.6 a barrel, compared to $61.9 in the corresponding period last year. Impact of lower prices was partially offset by higher volumes in refining and petrochemicals segments.

“Though regional refining margins trended downwards, our high-conversion refining system was able to take advantage of higher margins on middle distillates and wider discounts on sour crude oils,” said chairman Mukesh Ambani. “Our refining business delivered another record performance and achieved industry leading GRM (gross refining margin). Our petrochemicals business has a wide product portfolio, superior feedstock linkages and serves high-growth end-markets in India. As a result, we achieved yet another quarter of margin expansion in petrochemicals business and delivered EBIT (operating profit) growth of more than 20.5%.”

The gross refining margin (GRM) is the difference of the total value of petroleum products of a refinery and the price of the crude oil, and indicates the profitability. The GRM for Reliance in the first quarter stood at $11.5 a barrel compared to $10.4 in the same quarter last year.

Reliance Industries also reported a rise in other income -- earned from sources other than its operations -- at Rs 2,378 crore against Rs 1,584 crore in the previous year. There was higher interest income and profit from sale of investments.

Reliance Industries, which is closely followed for capex trends, said the capital expenditure for the quarter ended June 30, 2016 was Rs 26,690 crore ($4.0 billion), including exchange rate difference capitalisation. Capital expenditure was principally on account of ongoing expansions projects in the petrochemicals and refining business at Jamnagar, Dahej, Hazira, US Shale gas projects and Digital services business.

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