Mukesh Ambani-led Reliance Industries Ltd (RIL) on Friday reported a 4.5% year-on-year drop in its consolidated net profit to Rs 5,256 crore for the third quarter ending December against Rs 5,502 crore last year.
This is RIL’s first profit decline in nine quarters after a steep fall in crude oil prices that hurt the company’s core refining business and margins.
Turnover during October-December was also down by 20.4% to Rs 96,330 crore against Rs 121,077 crore in the year-ago period.
An unprecedented year-on-year fall in benchmark oil price by 30% was the key factor for the company’s declining revenue.
Gross refining margins, or the earnings, by the operator of the world’s biggest oil-refinery complex for turning every barrel of crude into fuel, were low in the fourth quarter. RIL’s GRM stood at $7.3 a barrel in the third quarter as compared to $7.6 a year ago.
“The quarter witnessed heightened volatility across the hydrocarbon business. Benchmark crude oil prices declined by around 40% through the quarter, with consequent impact on petrochemical feedstock and product prices,” the company said in a statement.
Declining feedstock prices impacted buying of the petroleum and petrochemical products, it said. “Our focus on operational efficiency and the superior configuration of assets helped us deliver an industry-leading performance in the refining and petrochemicals business despite sharp decline in crude and feedstock prices,” said Mukesh D Ambani, chairman and MD, RIL.
RIL’s exports declined by 21.5% to Rs 58,507 crore. While debt rose to Rs 150,007 crore from Rs 142,084 crore as on September 30, cash-in-hand fell to Rs 78,691 crore as on December 31 from Rs 83,456 crore at the end of previous first quarter.