RIL net dips 21% on falling gas output, petro biz | business | Hindustan Times
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RIL net dips 21% on falling gas output, petro biz

business Updated: Jul 21, 2012 02:24 IST
HT Correspondent
Mukesh Ambani

Dwindling margins in its petrochemicals business coupled with a continuous decline in gas output from the fields off the Andhra coast led to a 21% year-on-year decline in Mukesh Ambani-led Reliance Industries Ltd's (RIL's) net profit at Rs. 4,473 crore in the first quarter of the current fiscal year against Rs. 5,661 crore in the year-ago period.

Revenue, however, rose 13% at Rs. 91,875 crore during the April-June quarter compared to Rs. 81,081 crore in the same period last year.

Beating Street expectations, the company's gross refining margins (GRMs or the difference between the cost of crude and the price of refined products) for the first quarter rose to $7.6 per barrel against $7.2 per barrel a year ago.

Analysts said that improved GRMs could cheer the markets. RIL shares, however, closed the day at Rs. 723, down 0.7% before the earnings announcement.

Due to improved GRMs during the quarter, the company's net profit in the first quarter of the current fiscal year was higher when compared to Rs. 4,236 crore in the fourth quarter (January-March 12) of the last fiscal year.

"RIL has improved its earnings profile as profits from operations were higher on a sequential basis on the back of volume growth in the refining business," said Mukesh Ambani, chairman and managing director, RIL.

"We have commenced our next phase of capital investments in the refining and petrochemical segments to enhance earnings and value of our core energy businesses," he added.

With cash and cash equivalents of Rs. 70,732 crore ($12.7 billion), the company's other income almost doubled to Rs. 1,904 crore.

The company has invested the cash primarily in fixed deposits, certificate of deposits with banks, mutual funds and government securities/bonds.