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Reliance Industries Q1 profit rises to highest in over 7 years

Standalone net profit at Rs 6,318 crore, or Rs 19.5 per share, in April-June was 11.8 percent higher than Rs 5,649 crore, or Rs 17.5 a share, in the same period a year ago.

New Delhi: Reliance Industries Friday reported highest quarterly profit in seven-and-a-half years on strong refining and petrochemical margins.

Standalone net profit at Rs 6,318 crore, or Rs 19.5 per share, in April-June was 11.8 percent higher than Rs 5,649 crore, or Rs 17.5 a share, in the same period a year ago.

The first quarter profit in the current financial year 2015-16 was highest since earning in October-December 2007.

Revenue fell 26 percent to Rs 77,130 crore, hurt by a sharp fall in prices of crude oil and petroleum products, the company said in a statement.

Consolidated net profit rose 4.4 percent to Rs 6,222 crore in April-June quarter of the current fiscal as opposed to Rs 5,957 crore a year ago, the statement said.

RIL, operator of the world's biggest oil-refinery complex that can process low-grade crude and switch between fuels depending on market prices, earned USD 10.4 on turning every barrel of crude into petroleum product.

This was the highest gross refining margin it has earned in six year as compared to USD 10.1 per barrel margin in preceding January-March quarter and USD 8.7 of Q1 of 2014-15 fiscal.

The company, which is investing USD 12 billion to boost petrochemical capacity and refinery processes as well as build facilities to import ethane from US, said a 23 percent dip in its turnover to Rs 83,064 crore was mostly because of 43.5 percent dip in oil prices.

Joint Chief Financial Officer V Srikanth said USD 5 billion more will be invested to complete the refining and petrochemical cracker and downstream projects.

"The sharp increase in demand for transportation fuels helped us realize strong refining margins," Chairman Mukesh Ambani said.

RIL, which has in recent years invested in sectors like telecom, retail and financial services as it seeks to diversify revenue sources and reduce dependence on the country?s heavily-regulated oil and gas sector, said its telecom venture, Reliance Jio Infocomm will be able to start full commercial operations in the next financial year.

Before the earning announcement, RIL shares fell 1.9 percent to close at Rs 1,025.05 on the BSE.

While pre-tax profit from refinery business jumped 37.7 percent to Rs 5,252 crore, earnings from petrochemical business soared 25.5 percent to Rs 2,338 crore.

EBIT from oil and gas production business however dropped 97 percent to Rs 32 crore.

Other income fell to Rs 1,832 crore in April-June from Rs 1,974 crore. Depreciation of Indian rupee led to its costs jumping to Rs 902 crore, as against Rs 505 crore in first quarter of previous fiscal.

RIL's outstanding debt was higher at Rs 170,814 crore as on June 30, 2015 when compared to Rs 160,860 crore as on March 31, 2015. It had a cash balance of Rs 87,391 crore.

Lower oil prices meant earnings from refinery business fell 30 percent to Rs 68,729 crore but segment pre-tax profit was up 37.7 percent at Rs 5,252 crore.

During the quarter, RIL's Jamnagar refineries processed 16.6 million tonnes, which translates into 107 percent of the installed capacity.

Singapore refining margin in Q1 were USD 8 per barrel.

"Strong gasoline cracks, low energy cost and favourable crude differential helped boost refining margins and outperform regional benchmarks," RIL said.

Petrochemical business revenue was down 18 percent at Rs 20,858 crore but segment pre-tax profit was up 25.5 percent to Rs 2,338 crore, primarily on account of increase in prices.

US shale gas revenue fell 47.2 percent to Rs 854 crore and the company posted a pre-tax loss of Rs 49 crore.

Retail business turnover rose 17 percent to Rs 4,698 crore while pre-tax profit was up 37 percent at Rs 111 crore. RIL said it added 126 stores in first quarter to take the total store count to 2,747.