Billionaire Mukesh Ambani’s Reliance Industries Ltd (RIL) announced a 23% fall in its net profit at Rs 7,206 crore for the second quarter ended September 30, 2016 as against Rs 9,345 crore in the same period a year ago.
The last year Q2 profit was higher on the back of income from sale of RIL’s US shale gas assets. RIL is the owner of world’s largest refining complex at Jamnagar in Gujarat.
After excluding the exceptional item, the net profit was up 43.1%. Last year, the company had sold EFS Midstream LLC for Rs 4,574 crore.
“The company has achieved outstanding second quarter results with strong refining business performance and record petrochemicals segment earnings,” RIL Chairman and Managing Director Mukesh Ambani said.
It is significant to note here that RIL has been using profits from its core business of refining and petrochemicals to help its new telecommunications venture that started operations last month.
Ambani said the company’s refining business sustained high profitability in a tough environment highlighting our exceptional refining assets, dynamic response to market trends and robust operations.
RIL’s petrochemicals segment also gained significantly from higher volumes, integration and supportive product margins.
RIL’s profits from the refining business dipped 9.4% as it earned USD 10.1 as gross refining margins (GRMs) or profit in turning every barrel of crude oil into fuel in the second quarter. This is lower than USD 10.6 per barrel GRM in the same period of last fiscal.
“Our projects in the hydrocarbon chain are at advanced stages of mechanical completion and pre-commissioning activities. These projects will further strengthen our position as a leading operator in the energy and materials businesses,” Ambani added.
Stating that he was delighted and humbled by the response the company’s foray into telecom business under Jio brand has got, Ambani said, “Jio is built to empower every Indian with the power of data.”
During the quarter, Reliance Jio Infocomm, a subsidiary of Reliance Industries, issued Rs 2,000 crore of 5 year Non-Convertible Debentures (NCDs) in July 2016, bearing a coupon of 8.32 per cent per annum, payable annually. In September 2016, Reliance Jio Infocomm launched its digital services with the Jio Welcome Offer. In September 2016, Reliance Sibur Elastomers, a subsidiary of Reliance Industries has signed facility agreement for availing a term loan facility of $ 330 million by way of External Commercial Borrowings.