RIL net up 17% at Rs 5,661 cr
With gains in earnings from its oil refining business compensating for a drop in gas production from the prolific KG-D6, India’s largest gas field, Mukesh Ambani-led Reliance Industries Ltd (RIL) on Monday posted its highest quarterly profit in more than three years. HT reports.business Updated: Jul 26, 2011 01:29 IST
With gains in earnings from its oil refining business compensating for a drop in gas production from the prolific KG-D6, India’s largest gas field, Mukesh Ambani-led Reliance Industries Ltd (RIL) on Monday posted its highest quarterly profit in more than three years.
Net profit in the April-June quarter rose 16.7% to Rs 5,661 crore from Rs 4,851 crore a year ago.
Revenues rose to Rs 83,689 crore, or 37.2%. Significantly, there was a 49% year-on-year rise in “other income” – mainly a reference to money made in treasury management by the cash-rich company.
“The growth in the earnings was driven by strong refining margins and sustained performance in the petrochemicals business,” chairman Mukesh Ambani said as RIL reported it earned $10.3 on every barrel of crude processed, up from $7.3 a year ago. Refining margins were aided by surging global demand.
Reliance owns two refineries, located adjacent to each other at Jamnagar in Gujarat state, which together form the world’s biggest complex of its kind.
RIL sat on a cash chest of about $10.7 billion or R48,150 crore at the end of June. The company’s gas production from its KG-D6 block off Andhra Pradesh fell to about 48 million cubic metres a day from about 60 million cubic metres a year earlier. However, the recent government approval for RIL’s deal with BP for the British firm to acquire 30% stakes in 23 RIL blocks will give it access to the required technology to boost output at its KG-D6 gas field.
“RIL results are broadly on expected lines,” said SP Tulsian, independent analyst, adding that the company’s earnings before interest, taxation, depreciation and amortisation (EBITDA) margin dropped by 2.3 percentage points in the petrochemicals business which was “a bit of a disappointment.”
Jagannadham Thunuguntla, Head of Research, SMC Global Securities, said, “The only concern is slowing KG D6 production. If the company can’t solve it, this will overshadow all.”