New Delhi: Reliance Industries today posted a 32 percent jump in its fourth quarter net profit, the biggest rise in almost three years, as strong margins in its oil refining business helped offset fall in natural gas production.
RIL, which operates the world's biggest refining complex at Jamnagar in Gujarat, reported a net profit of Rs 5,589 crore in January-March as against Rs 4,236 crore in the same period a year ago.
The better-than-estimated profit, the second consecutive quarter of increase after four quarters of decline, came on the back of rise in earnings from turning crude oil into petrol, diesel and other petroleum products.
RIL Chairman and Managing Director Mukesh Ambani said, "The growth in earnings was largely driven by strong and improved refining margins during the year."
RIL earned an average of USD 10.1 on turning every barrel of crude oil into fuel in the quarter as compared to USD 7.6 per barrel gross refining margin in the same period last year.
Sales, however, dropped 1.4 percent at Rs 86,618 crore.
Debt soared to Rs 72,427 crore at the end of Q4, up from Rs 68,259 crore at the beginning of the fiscal. At quarter end, it had a cash pile of Rs 82,975 crore, making the company debt free on a net basis.
Also, production at its shale gas ventures in North America rose and annual revenue from its retail business crossed Rs 10,000 crore.
"We are working on projects that form the foundation of our aspirations to become one of the world's most competitive producers of petroleum and petrochemical products while developing consumer centric businesses in India," he said.
With a net profit in 2012-13 rising by 4.8 percent to Rs 21,003 crore, RIL today is India's second most profitable company behind state-owned Oil & Natural Gas Corp (ONGC). ONGC had a net profit of Rs 25,122.92 in 2011-12.
Before the announcement of the earnings, RIL shares rose 1.38 percent to close a Rs 804.50 on BSE on Tuesday.
RIL reported more than doubling of earnings before interest and taxation (EBIT) from the oil refining business at Rs 3,520 crore in the January-March quarter.
The twin refineries at Jamnagar can turn heavier grades of oil, which are typically cheaper, into high-value fuels.
These refineries with a total capacity of 62 million tonnes, processed 16.1 million tonnes of crude as compared to 17.5 million tonnes in Q3 of current year and 16.3 million tonnes in Q4 of last fiscal.
Segment revenues were up 2.2 percent to Rs 77,872 crore.
Continuing fall in natural gas output at its flagship KG-D6 gas fields in the Bay of Bengal led to earnings from the oil and gas business drop by a massive 51.6 percent to Rs 460 crore. Segment revenue dropped by 38.8 percent to Rs 1,597 crore.
RIL said it is addressing the fall in KG-D6 output to about 16 million standard cubic metres per day, a fourth of the peak achieved in 2010, by upgrading production facilities and starting drilling in satellite fields around the main gas fields in the block.
"As part of the continuing efforts to enhance the production from the block... Revised field development plan for MA (field) to enhance gas production (was) submitted in February 2012 was agreed by (block oversight panel) Management committee (MC)," a RIL statement said.
Also, revised investment plan for the flagging D1-D3 field was submitted in August 2012 and the same for R-Series satellite fields was submitted in January 2013.
Besides, RIL submitted an Integrated Block Development Plan for four discoveries (D-32, D-40, D-9 and D-10) in NEC-25 block off the Orissa coast.
The company reported a 12.8 percent drop in earnings from its core petrochemical business at Rs 1,895 crore on lower production of ethylene and propylene.
Of its new business, turnover from retail grew 42 percent to Rs 10,800 crore as the company continued to expand stores across the country.
The retail business achieved cash break-even with earnings before depreciation, finance cost and tax expense (PBDIT) of Rs 78 crore.
It has over over 1,450 stores in 129 cities across India.
RIL's subsidiary, Reliance Jio Infocomm Ltd (formerly Infotel Broadband Services Ltd, which is the only private player with Broadband Wireless Access spectrum in all the 22 telecom circles of India), is setting up a network using to usher the 4G revolution into India.
First Published: Tuesday, April 16, 2013, 17:46