Reliance Industries ‘s fourth quarter standalone net profit surpassed street expectations on Friday, rising 22.8 percent (up 10.9 percent on yearly basis) to Rs 6,243 crore driven by strong operational performance in refining business. CNBC-TV18 poll had expected profit at Rs 6,000 crore for the quarter.
However, revenue during the quarter missed street expectations, down 30.1 percent (down 41 percent year-on-year) to Rs 56,043 crore on sequential basis. Analysts had expected revenue at Rs 65,000 crore for the quarter.
“Sharp Y-o-Y fall in benchmark oil price of around 50 percent was the key factor for the decline in revenue,” Reliance said in its press release.
Reliance’s consolidated net profit increased 22.8 percent (up 8.5 percent on yearly basis) to Rs 6,381 crore while revenue dropped 27.9 percent (down 34.8 percent year-on-year) to Rs 67,470 crore in the quarter ended March 2015.
Gross refining margin (GRM) also topped expectations at USD 10.1 a barrel against USD 7.3 a barrel in the December quarter, supported by lower flat prices resulting in lower fuel costs and firm gasoline, gasoil and naphtha cracks. Analysts had expected GRM at USD 9.90 a barrel for the quarter.
“In a time when the collapse of crude oil prices unsettled the hydrocarbons markets, our refining business delivered record earnings,” said Mukesh Dhirubhai Ambani, chairman and managing director, Reliance Industries.
He further said the company has made highest-ever capital investment into hydrocarbon business and next-generation digital services initiative.
“We maintained our track-record of adhering to highest standards of safety and operational excellence,” said Ambani.
On standalone basis, the company recorded an operating profit growth of 19.7 percent at Rs 8,629 crore and 640 basis points expansion in margin at 15.4 percent in Q4 on sequential basis, driven largely by refining business and stable petrochemical business.
Refining business’ earnings before and tax (EBIT) shot up 47.8 percent sequentially to Rs 4,727 crore with margin expansion of 530 basis points at 9.7 percent.
Petchem EBIT fell 3.4 percent quarter-on-quarter to Rs 2,122 crore during March quarter with EBIT margin at 11 percent, up 100 basis points over previous year. Improvement in EBIT margin was aided by firm polymer and polyester deltas, said the company.
On a Q-o-Q basis, Q4FY15 revenues and EBIT of oil & gas exploration and production business were down by 9.2 percent and 38.6 percent respectively, due to lower average oil prices and lower gas production from KG-D6 and Tapti fields.
During the fourth quarter, KG-D6 field produced 0.5 million barrels of crude oil, 0.1 million barrels of condensate and 36.5 BCF of natural gas, a reduction of 3 percent of crude oil, 0.4 percent of condensate and 5 percent of natural gas on a Q-o-Q basis.
“Fall in production was mainly due to natural decline in the fields coupled with partial shutdown of MA field due to a fire in the east west pipeline, partly offset by incremental production from side track well MA5H,” the release said.
Panna-Mukta fields produced 1.6 million barrels of crude oil and 17.5 BCF of natural gas in Q4FY15, a reduction of 12 percent and 6 percent respectively on sequential basis. Tapti fields produced 0.1 million barrels of condensate and 2.8 BCF of natural gas in Q4, a growth of 3 percent of condensate production and reduction of 7 percent of natural gas, Q-o-Q. Reliance said the field was progressing towards cessation of production.
In FY15, RIL achieved a turnover of Rs 3,88,494 crore, a decrease of 13 percent as compared to Rs 4,46,339 crore in the previous year. However, profit after tax was higher by 4.8 percent at Rs 23,566 crore as against Rs 22,493 crore in the previous year, said the company in its filing.
Outstanding debt as on March 2015 was Rs 1.6 lakh crore compared to Rs 1.38 lakh crore at the end of previous financial year. Cash and cash equivalents were at Rs 84,472 crore as of March 2015.
Reliance said the capital expenditure for the year ended March 2015 was Rs 1,00,247 crore on account of ongoing expansions projects in the petrochemicals and refining business at Jamnagar, Dahej and Hazira, Broad band Access and US Shale gas projects.
Retail and Broadband businesses
Revenue for Reliance Retail grew by 31.1 percent Y-o-Y to Rs 4,788 crore during the quarter despite slow consumption growth and challenging macroeconomic environment. As on March 2015, Reliance Retail operated 2,621 stores across 200 cities, with over 12.5 million square feet space.
In March 2015, Reliance Jio Infocomm successfully acquired the right to use spectrum in 800 MHz and 1800 MHz in 13 key circles across India in the spectrum auction conducted by the government. With this acquisition, in addition to the pan-India 2300 MHz spectrum, RJIL has spectrum in either 800 MHz or 1800 MHz or both in 20 out of the total of 22 circles in the country, said Reliance.
RJIL’s total equivalent spectrum footprint has increased from 597.6 MHz to 751.1 MHz (including uplink and downlink), strengthening its position as the largest holder of liberalized spectrum.
The company has recommended a dividend of Rs 10 per equity share.