Strong margins boost RIL net

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Mumbai, April 16: Reliance Industries today reported a 32 per cent jump in fourth-quarter profits at Rs 5,589 crore — its strong performance buttressed by an almost 33 per cent year-on-year surge in gross refining margins (GRM) to $10.1 per barrel in the January-March quarter. GRM in the same quarter a year ago was $7.6 per barrel. But its turnover fell 10 per cent on a trailing quarter basis to Rs 86,618 crore from Rs 96,307 crore in the third quarter ended December 31 last year. Analysts had expected the Mukesh D. Ambani flagship to post a net profit of around Rs 5,300 crore. The estimate went off the rails because the analysts hadn't expected such a robust surge in GRM. Most analysts had projected GRM of $9.9 per barrel. GRM is the difference between the cost of processing crude oil and revenues obtained from the sale of finished products. The company announced a dividend of Rs 9 per share, leading to a payout of Rs 3,092 crore this year. Consolidated full-year revenues rose 10.8 per cent to Rs 3,97,062 crore and consolidated net profit for 2012-13 rose 5.9 per cent to Rs 20,879 crore. Sources said the fall in the company's topline was largely because of the oil and gas business where annual revenues dropped nearly 35.8 per cent. They added that the quarter also witnessed a drop in the price of crude oil and products, thus affecting revenues even as a month-long shutdown in its refinery saw its crude throughput going down 7 per cent. The company said it planned to invest over $5 billion over the next three to five years on the KG-D6 block enhancement plan that is designed to develop around 4 trillion cubic feet of discovered natural gas resources in the block. The debt-free oil refiner saw its cash hoard swell to Rs 82,975 crore (or $15.3 billion), but the company remained cagey about what it planned to do with it. "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," said chairman and managing director Mukesh Ambani without going into specifics. The company said its retail business had crossed a major milestone with turnover rising 42 per cent to Rs 10,800 crore — making it arguably the biggest retail player in the country. It said the retail business had achieved cash break even with earnings before depreciation, finance costs, and tax expense put at Rs 78 crore. The company operates 1,450 stores in 129 cities across India. RIL also said its subsidiary Reliance Jio Infocomm Ltd — its other big consumer-centric business — had "completed the detailed planning for pan-India implementation of the infrastructure needed for the project". It did not spell out the date for the rollout of its long-awaited 4G service for which it recently struck a deal with Anil Ambani's Reliance Infratel to hire its fibre optics bandwidth capacity. Among its various businesses, the oil and gas segment saw revenues dropping 38.8 per cent on a year-on-year basis to Rs 1,597 crore. RIL here said that there was lower production, both from its KG-D6 block apart from the Panna-Mukta fields. On the other hand, though the refining & marketing business witnessed a 2.2 per cent growth in segment revenues to Rs 77,872 crore, it showed a fall on sequential basis. However, margins climbed to 4.5 per cent from 2.2 per cent in the same period last year. The petrochemical business reported falling margins in the polyester fibre and yarn business. http://www.telegraphindia.com/1130417/jsp/business/story_16794088.jsp#.UW6z5aKBlA0