Ril Q1 Profit Up 13% On Petchem, Refining; GRM At $11.90/bbl; Buys Stake In Balaji Telefilms

Ril Q1 Profit Up 13% On Petchem, Refining; GRM At $11.90/bbl; Buys Stake In Balaji Telefilms

Oil-to-telecom major Reliance Industries’ earnings surpassed analysts’ expectations on Thursday as consolidated profit grew by 12.7 percent sequentially (up 28.3 percent YoY) to Rs 9,079 crore in Q1 FY18, driven by one-time gain and robust growth in petchem & refining businesses.

Revenue from operations during the quarter declined 2.5 percent to Rs 90,537 crore QoQ but increased 26.7 percent year-on-year.

“Industry leading portfolio of assets in the refining and petrochemicals business contributed to considerable improvement in earnings for the quarter,” Mukesh Dhirubhai Ambani, Chairman and Managing Director said.

Gross refining margin for the quarter grew by 3.5 percent to 9-year high of USD 11.9 a barrel against USD 11.50 a barrel on a sequential basis.

Singapore GRM was flat at USD 6.40 a barrel QoQ as lower cracks for light and middle distillates were offset by stronger fuel oil cracks and lower freight, it said.

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Refining segment’s earnings before interest and tax (EBIT) rose 18.8 percent quarter-on-quarter to Rs 7,476 crore, with margin expansion of 250 basis points.

Petrochemical EBIT increased 17.1 percent to Rs 4,031 crore QoQ, with margin expansion of 280 basis points at all-time high of 15.8 percent.

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Both segments’ EBIT performance was far ahead of CNBC-TV18 poll estimates of Rs 3,600 crore and Rs 6,150 crore, respectively.

Profit was estimated at Rs 7,960 crore and gross refining margin at USD 11 a barrel, according to average of estimates of analysts polled by CNBC-TV18.

The company earned one-time gain of Rs 1,087 crore on sale of stake in Gulf Africa Petroleum Corporation (GAPCO). Other income increased 9.7 percent sequentially to Rs 2,124 crore in Q1.

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Ambani said retail business witnessed accelerated growth momentum with YoY revenue growth of 74 percent.

On a sequential basis, organised retail business showed 12 percent growth at Rs 11,571 crore and EBIT grew by 20.2 percent to Rs 292 crore, with margin expansion of 17 basis points.

During the quarter, Reliance Retail added 18 stores across various store concepts. At the end of the quarter, it operated 3,634 stores across 703 cities with an area of over 13.8 million square feet.

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Finance cost during the quarter more than doubled to Rs 1,119 crore from Rs 556 crore on a sequential basis but declined 7.2 percent year-on-year.

Its outstanding debt as of June 2017 was Rs 2,00,674 crore, increased 2 percent from Rs 1,96,601 crore as on March 2017. Cash and cash equivalents stood at Rs 72,107 crore at the end of June quarter against Rs 77,226 crore in March quarter.

Reliance said capital expenditure for the quarter was Rs 25,192 crore on account of ongoing projects in the petrochemicals and refining business at Jamnagar and digital services business.

Meanwhile, before earnings announcement, Jio launched the rights issue of optionally convertible preference shares to raise up to Rs 20,000 crore, reports CNBC-TV18.

Reliance Industries will pick up 24.9 percent stake in Balaji Telefilms for Rs 413.28 crore, through preferential issue of 2.52 crore shares at a price of Rs 164 per share.

After this stake buy, Reliance will get two board seats on Balaji.

The stock price of Reliance Industries, which announced earnings after market hours, closed down 0.31 percent at Rs 1,528.70 on the BSE.

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The market capitalisation of the company crossed Rs 5 lakh crore mark for the first time on July 17, which was at Rs 4.97 lakh crore at Thursday’s closing price.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

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