India’s oil-to-telecoms conglomerate Reliance Industries Ltd reported on Friday a better-than-expected 18 percent increase in first-quarter profit on higher margins from its core refining business.
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Net income at the company increased to 75.5 billion rupees ($1.1 billion) in the three months ended June 30 from 63.7 billion rupees a year earlier, the Mumbai-based company said Friday in a stock exchange statement and according to Indian Accounting Standards. A dip in crude oil prices brought down RIL’s cost of raw material by 25.5 percent to Rs 37,469 crore in Q1 FY17, from Rs 50,305 crore a year earlier, thereby boosting profitability.
Then in terms of another key parameter, the gross refining margin – the difference between the crude oil price and the value of petroleum products coming out of a refinery – the achievement at $11.5 per barrel was also well above the forecast of $9 to $10.3 per barrel. “The business delivered strong PBDIT of Rs 240 crore in first quarter 2016-17 as against Rs 198 crore in the corresponding period of the previous year”, Reliance Industries said in a BSE filing.
Newsletter has been successfully subscribed. We maintained our earnings growth trajectory during this quarter, as the world grappled with new dimensions of economic uncertainty. The jump in refining margins comes as a surprise, as most analysts were expecting the company to report margins of around $9 per barrel, citing the regional benchmark Singapore gross refining margin that was down 38% on-year at an average $5 a barrel.
Revenues for oil and gas segment decreased 34.8 percent Y-o-Y to Rs 1,340 crore in the three months. This reflected lower product prices resulting from decline in feedstock prices, the company said, but was partially offset by higher volumes mainly due to new PTA and PET capacities.
Referring to Reliance Jio Infocomm Ltd, a subsidiary of RIL, which is rolling out a pan-India digital services network, the company said during the quarter, Reliance Jio extended its trial services to all LYF device users under the Jio LYF Preview Offer.
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Its debt rose to Rs 186,692 crore at the end of June from Rs 180,388 crore as on March 31, 2016. Cash in hand was up marginally at Rs 90,812 crore from Rs 89,966 crore at end of FY16.
