Reliance net up 16% to Rs 5703 crore
By: ICN Bureau
Last updated : March 06, 2018 7:58 pm
Reliance Industries Ltd (RIL) has posted an increase of 16 percent in its net profit at Rs 5,703 crore for the second quarter of the current year ending September 30.
Reliance Industries Ltd (RIL) has posted an increase of 16 percent in its net profit at Rs 5,703 crore for the second quarter of the current year ending September 30. The company had reported a net profit of Rs 4,923 crore during the July-September quarter last fiscal. Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, RIL said: "Our first half financial performance has been consistent. The increase in profits was largely driven by improved performance in the refining and petrochemicals business. All our manufacturing facilities operated at record levels with refineries achieving operating rates of 110%. RIL has strong balance sheet and sustained earning base to pursue growth opportunities."
CORPORATE HIGHLIGHTS
Reliance Industries Limited (RIL) announced a rich gas and condensate discovery in the very first well drilled in the block CY-PR-DWN-2001/3(CYPR-D6) located in deepwater Cauvery-Palar basin. The block with an area of about 8600 sq km was awarded to RIL under the bidding round of NELP-III. This is one of the exploration blocks where BP has 30% participating interest.
On 30th August 2011, RIL and BP announced the completion of BP's acquisition of a 30% stake in 21 oil and gas production sharing contracts (PSCs) that Reliance operates in India, including the producing KG- D6 block.
Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: "Our first half financial performance has been consistent. The increase in profits was largely driven by improved performance in the refining and petrochemicals business. All our manufacturing facilities operated at record levels with refineries achieving operating rates of 110%. RIL has strong balance sheet and sustained earning base to pursue growth opportunities."
FINANCIAL PERFORMANCE REVIEW AND ANALYSIS
RIL achieved a record turnover for the half year ended 30th September 2011 of Rs164,479 crore ($ 33.6 billion), an increase of 36.0% on a year-on-year basis. Increase in volumes accounted for 3.5% growth in revenue and higher prices accounted for 32.5% growth in revenue. Exports were higher by 52.2% at 101,872 crore ($ 20.8 billion) as against Rs66,936 crore in 1H FY10-11.
Higher crude prices resulted in consumption of raw materials increasing by 44.4% to Rs129,104 crore ($ 26.4 billion) on a year-on-year basis.
Employee costs were at Rs1,593 crore ($ 325 mn) for the half year as against Rs1,277 crore.
Other expenditure increased by 17.3% from Rs74.52bn to Rs8,743 crore ($ 1.8 billion) due to higher power & fuel expenses and exchange difference.
Operating profit before other income and depreciation increased by 5.5% from Rs18,738 crore to Rs19,770 crore ($ 4.0 billion). Net operating margin was lower at 12.0% as compared to 15.5% in the corresponding period of the previous year due to base effect.
Other income was higher at Rs2,180 crore ($ 445 million) as against Rs1,394 crore on a year-on-year basis primarily due to higher average liquid investments.
Depreciation (including depletion and amortization) was lower by 10.2% at Rs6,164 crore ($ 1.3 billion) against Rs6,862 crore in 1H FY 2010-11 due to lower depletion charge in oil & gas as a consequence of the transfer of 30% Participating Interest (PI) in 21 blocks to BP.
Interest cost was higher at Rs1,205 crore ($ 246 mn) as against Rs1,083 crore in 1H FY 2010-11 principally due to higher foreign exchange difference. This resulted in gross interest cost being higher at Rs1,481 crore ($ 302 million) as against Rs1,311 crore in 1H FY 2010-11. Interest capitalized was higher at Rs276 crore ($ 56 million) as against Rs228 crore.
Profit after tax was Rs11,364 crore ($ 2.3 bn) as against Rs9,774 crore for the corresponding period of the previous year.
RIL had cash and cash equivalents of Rs61490 crore ($ 12.6 billion). These were in fixed deposits, certificate of deposits with banks, mutual funds and Government securities / bonds. RIL's net debt was equivalent to 0.2 time annualized PBDIT for the half year ended 30th September 2011.
The net capital expenditure towards projects for the half year ended 30th September 2011 was Rs6,691 crore ($ 1.4 billion). However, cash outflow on account of capex for the first half amounted to Rs3,533 crore ($ 721 million).
Basic earnings per share (EPS) for the half year ended 30th September 2011 was Rs34.7 ($ 0.70) against Rs29.9 for the corresponding period of the previous year.
Outstanding debt as on 30th September 2011 was Rsw71,399 crore ($ 14.6 billion) compared to 67,397 crore as on 31st March 2011. Net gearing as on 30th September 2011 was 5.4% as against 13.5% as on 31st March 2011.
DOMESTIC OPERATIONS
OIL AND GAS PRICES
For the quarter ended 30th September 2011, Brent prices were $112/bbl vis-í -vis $77/bbl in the quarter ending September 30th 2010. For the six months ended 30th September 2011 Brent prices were $114/bbl vis-a-vis $78/bbl in September 2010.
Domestic Blocks
RIL received Government of India's approval in August 2011 for assigning 30% participating interest in 21 blocks to BP. Approval for balance 2 blocks is pending. Pursuant to the approval, all payments due from BP have been received by RIL as per the terms of agreement. All PSCs have been amended, signed by BP and RIL along with Hardy and Niko wherever applicable and have been submitted to the Government.
The integration process is currently underway, and the joint teams are evolving strategies to operate across the gas value chain in India from exploration, development, distribution and marketing. The teams are also reviewing key imperatives aimed at maximizing production opportunities from KG-D6 and other discoveries in the blocks they hold together.
During the period, the Company submitted a proposal for commerciality for Discoveries D-43, D-45, D-46, D-47, D-48, D-49, D-50, and D-51 in the onshore CB-ONN-2003/1 (CB-10) block located in the Cambay basin.
KG- D6 Operations
Production from KG-D6 was 2.7 million barrels of crude oil, and 303.4 BCF of natural gas, a reduction of 42.1% and 20.3% respectively on a year-on-year basis. The reduction in production was mainly due to reservoir complexity. Production of gas condensate was 0.40 million barrels, an increase of 26.3 % over the previous period.
Gas was sold as per the Government's Gas Utilization Policy and at a price of $ 4.2 /MMBTU.
First Published : October 16, 2011 12:00 am