RIL delivers another billion-dollar profit in Q2, here are top 5 takeaways

NEW DELHI: India’s largest private refiner, Reliance Industries, on Thursday reported an 18 per cent YoY growth in standalone profit for the September quarter.

The numbers largely came in line with analyst estimates. Here are key takeaways from the quarterly numbers:

Top line jumped, debt at $28.4 billion: Consolidated profit for the quarter dropped 24 per cent to Rs 7,833 crore from Rs 10,314 crore reported for the same period a year ago. However, consolidated revenue was higher at Rs 81,651 crore compared with Rs 74,490 crore reported for the same period a year ago, the company said.

On a standalone basis, net profit was up 18 per cent YoY at Rs 7,704 crore for the September quarter. The company had reported a net profit of Rs 6,534 crore for the corresponding quarter last year. The company had a cash reserve of $12.4 billion as of September 30, while outstanding debt stood at $28.4 billion. The company incurred a capex of $2.6 billion during the quarter.

Petchem segment boosted margins: Refining revenue came in at Rs 51,838 crore (Rs 51,265 crore YoY), while revenue for the petchem segment stood at Rs 21,923 crore (Rs 19,851 crore YoY). Refining Ebit margin came in at 11.4 per cent for the quarter, which was higher than 10.5 per cent that the company had reported in the year-ago quarter. Petchem Ebit margin stood at 16.2 per cent, which too was higher than 12.6 per cent that the refiner had reported in the year-ago quarter.

GRM beats estimates: The Mukesh Ambani-led company reported gross refining margins (GRM) of $10.1 per barrel compared with $10.6 per barrel in the same quarter last year.
RIL’s GRM outperformed Singapore complex margins by $5 a barrel. Analysts in an ET Now poll had estimated a GRM of $10 per barrel for the quarter. Reliance said its refineries processed 18 mmt of crude, which was 5 per cent higher on a YoY basis.

Production dropped in KG DG basin: The company said of crude oil production in KGD6 field stood at 0.26 mmbbl, down 34 per cent on YoY basis. Production of natural gas also declined 32 per cent YoY to and 25.1 BCF. Condensate production in 2Q FY17 was at 0.03 mmbbl.

“Fall in oil and gas production was mainly on account of a natural decline in the fields during the quarter. The KGD6 JV has completed one side track at MA field, which has been put to production in Q3 of FY17,” the company said.

Lower oil prices and a drop in gas production from KG-D6 block led to a 39.9 per cent YoY drop in E&P revenues.

Jio likely to extend free services: Reliance Industries said its telecom venture Reliance Jio may extend the period of free services in case its subscribers are not able to get adequate experience of seamless connectivity across network due to interconnection congestion and if the quality parameters are not as per the benchmarks desired by the Jio management. During the quarter, Jio acquired rights to use 269.2 MHz spectrum across all 22 service areas in the country in the recently-conducted auction. The payment to be made for the right to use this technology-agnostic spectrum for a period of 20 years is Rs 13,672 crore, the company said.

“Through this acquisition, Jio’s total spectrum footprint has increased to 1,108 MHz (UL+DL) with an average life of over 16 years, further strengthening its leadership position in liberalised spectrum holdings,” the company said.