Forbes India 15th Anniversary Special

RIL's Q4 consolidated net profit up 16%

Full year consolidated net rises 17%; GRM at $10.8 per bbl

Salil Panchal
Published: Apr 22, 2016 05:41:06 PM IST
Updated: Apr 22, 2016 07:48:08 PM IST
RIL's Q4 consolidated net profit up 16%
On a standalone basis, the oil-to-yarn and retail conglomerate posted a 17.3 percent rise in net profit to Rs 7,320 crore, compared to Rs 6,243 crore a year earlier

India’s second-largest firm by market value Reliance Industries (RIL) on Friday reported a 15.9 percent year-on-year jump in consolidated net profit to Rs 7,398 crore (Rs 6,381 crore) for the three months ended March 31, 2016, as a strong refining and petrochemicals business performance, led to higher operating profits.

Sequentially, the net profit growth was 1.5 percent. The company posted revenues of Rs 60,252 crore (Rs 67,470 crore) during the period.

On a standalone basis, the oil-to-yarn and retail conglomerate posted a 17.3 percent rise in net profit to Rs 7,320 crore, compared to Rs 6,243 crore a year earlier. The increase in profitability for Reliance Industries came despite an 10.8 percent decline in turnover to Rs 49,957 crore (Rs 56,043 crore).

For the full year, RIL’s consolidated net profit rose 17.2 percent to Rs 27,630 crore (Rs 23,566 crore). Revenues for the twelve months to March 2016 slid 26.3 percent to Rs 2,76,544 crore (Rs 3,75,435 crore). Since RIL is present across the hydrocarbon value chain, producing everything from upstream oil and gas to downstream products such as refined petrol and diesel and petrochemicals, lower crude prices are the primary reason for both its turnover declining as well as expenses coming down. Crude oil prices averaged $45.6 per barrel in FY16, down 45 percent year-on-year.

The Reliance stock ended down 0.21 percent at Rs 1,038.75 on BSE, ahead of the earnings which were announced after market hours.

“FY2015-16 has been a year of outstanding achievement for our downstream hydrocarbon businesses, notwithstanding persisting global economic uncertainty.
Refining and petrochemicals delivered record operating and financial performances,” RIL chairman and managing director Mukesh Ambani said in a statement on Friday.

While turnover from RIL’s refining business declined 14.8 percent year-on-year to Rs 48,064 crore, earnings before interest and tax (EBIT) from the segment jumped 30.4 percent to Rs 6,394 crore in the January-March period.
RIL reported a gross refining margin (GRM)—the difference between the value of petroleum products sold and the cost of processing crude—of $10.8 per barrel in the March quarter, compared to $10.1 levels a year earlier.
RIL’s petrochemicals business reported a 3.9 percent year-on-year decline in turnover to Rs 20,915 crore in the fourth quarter of fiscal 2016. But segment EBIT from the business grew by 35.4 percent in the same period to Rs 2,713 crore.

RIL’s oil and gas exploration and production business continued to underperform with revenues from the segment declining by 26.3 percent year-on-year in the January to March period to Rs  901 crore. The company’s shale gas business in the US also performed poorly during the quarter with a decline in turnover.

RIL is gearing up for the launch of its state-of-the-art fourth generation (4G) digital services business, in coming months. Earlier this month, the company announced the launch of a new 8,100 km cable system, the Bay of Bengal Gateway (BBG).  

RIL’s retail business continued its growth momentum in the March-ended quarter, as turnover rose by 20.7 percent year-on-year to Rs 5,781 crore. Operating profit from the business grew by 26 percent in the same period to Rs 131 crore. The company said it was still expanding its retail operations and now operates more than 3,245 stores in 532 cities across the country.

(Reliance Industries Ltd owns Network 18, the publishers of Forbes India.)