Energy and petrochemicals major Reliance Industries Limited (RIL) today reported a 0.2 per cent quarter-on-quarter (QoQ) rise in its net profit for the third quarter for FY14 to Rs 5511 crore, helped by steady margins in its refining business.
The Mukesh Ambani-led company had reported a net profit of Rs 5502 crore in the third quarter of the previous fiscal.
Releasing its unaudited financial results for the quarter and the nine-month period ended December 31, 2013, the company said is turnover had gone up by 10.5 per cent to Rs 106,383 crore in Q3 from Rs 96,307 crore in the same quarter of FY13.
The company said its exports increased by 11.3 per cent to Rs 74,495 crore in the third quarter. Its gross refining margin was $7.6 per barrel (bbl) for the quarter.
The company’s revenue for the nine-month period increased by 6.7 per cent to Rs 303,495 crore, while exports grew by 16.4 per cent to Rs 208,950 crore. The net profit for the period went up by 6.1 per cet to Rs 16,353 crore.
“Reliance’s robust refining configuration enabled it to deliver stable refining profits in 3Q FY14, against the backdrop of declining regional benchmark margins,” RIL Chairman and Managing Director Mukesh Ambani said.
“ Even as we invest to further strengthen our energy businesses, this quarter demonstrates the outstanding quality of our refining and petrochemical business resources and their ability to deliver creditable performance in a period marked by cyclicality and uncertainties. We are happy to announce the commissioning of our new polyester facility in Silvassa, the first amongst a series of projects that underpin RIL’s industry-leading competitive position. Our retail business continues on its rapid growth trajectory with 38% revenue growth during the quarter,” he said.
The company said in a press release that higher prices accounted for 6.4% growth in revenue while increase in volume accounted for 0.3% growth in revenue.
The release said the company’s KG-D6 field produced1.45 million barrels of crude oil, 0.2 million barrels of condensate and 135 BCF of natural gas in 9M FY14, a reduction of 38%, 44% and 51%respectively on a Y-o-Y basis. Fall in production is mainly attributed to geological complexity and natural decline in the fields, it said.
The release said Panna-Mukta fields produced 5.7 million barrels of crude oil and 50.9 BCF of natural gas in 9M FY14 – a reduction of 11% and 7% respectively on Y-o-Y basis. The decrease in production was due to a shut-down of Panna-Mukta field for three days for SBM maintenance and re-certification work, coupled with natural decline. The decline in production was partly compensated by incremental production from Panna “L” area and Infill wells.
Tapti produced 0.2 million barrels of condensate and 21.4 BCF of natural gas in 9M FY14 – a decline of 52% and 41% respectively on Y-o-Y basis. The decrease was due to a natural decline and under performance of new ERD wells drilled last year.
Reliance’s shale gas business witnessed strong sequential growth during the quarter. Reliance’s share of gross production stood at 43 Bcfe in 3Q FY14, which reflected a growth of 33% Y-o-Y. On a sequential quarter basis, volumes grew 18%.
The company said 9M FY14 revenue from the Refining and Marketing segment increased by 7.2% Y-o-Y to Rs 274,346 crore, while EBIT was flat at Rs 9,266 crore.
RIL’s Gross Refining Margin (GRM) for the nine months period was at $ 7.8 /bbl as against $ 9.0 /bbl in the corresponding period of the previous year. For 9M FY14, RIL Jamnagar refineries processed 51.7 MMT of crude, achieving an average utilization of 111%.
Total exports of refined products reached $ 30.2 billion for 9M FY14 period and accounted for 64% of aggregate refinery product volumes. Exports of refined products were 33.7 MMT in 9M FY14 as compared to 30.9 MMT during the same period last year.
During 3Q FY14, RIL Jamnagar refineries processed 17.0 MMT of crude, an operating rate of 110%, sequentially lower due to maintenance turnaround. With turnarounds, post the driving season, the third quarter utilizations in North America, Europe and Asia were 83.5%, 74.3% and 85.8% respectively.
During the quarter, revenue from Refining & Marketing segment increased by 10.1% to Rs 95,432 crore ($ 15.4 billion) from Rs 86,641 crore in 3Q FY13. Growth in revenue was accounted by 1% higher volume and 9.1% increase in prices.
EBIT was at Rs 3,141 crore ($ 508 million) down 13.1% on Y-o-Y basis, and 1.0% on a sequential quarter basis. RIL’s refining business maintained stable earnings on Q-o-Q basis despite lower volumes and decline in regional benchmark complex margins.
RIL’s margins were positively impacted by widening crude differentials, strength in middle-distillates and naphtha product cracks, which was offset by weak gasoline cracks.
The company’s 9M FY14 revenue from the petrochemicals segment increased by 9.4% Y-o-Y to Rs 72,122 crore ($ 11.7 billion). Higher prices accounted for 9.5% growth in revenue which was partly offset by the decrease in volumes of 0.1%. EBIT margin improved to 9.0% in 9M FY14 as compared to 8.2% a year ago.
RIL’s 3QFY14 Petrochemical EBIT declined 15.2% Q-o-Q to Rs 2,124 crore impacted by poor domestic demand for polymers and polyester, sequential decline in regional deltas for key products – PP, PVC and fibre intermediates.
Reliance Retail registered a growth of 38% in turnover over the same quarter last year. Revenues grew to Rs 3,927 crore in the third quarter compared to Rs 2,839 crore during the same period in the previous year. For the nine months ended December 2013, the retail business achieved a turnover of Rs 10,857 crore as against Rs 7,749 crore in the corresponding period of the previous year, a growth of 40%.
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