RIL posts muted Q1 profit growth at 4.4%

MUMBAI: Energy-to-retail conglomerate Reliance Industries (RIL) posted a muted 4.4% growth in its first quarter net profits ended June 30, 2015. The company’s consolidated profit after tax stood at Rs 6,222 crore as loss-making US shale gas operations were a drag on profits from core refining and petrochemicals business.
The Mukesh Ambani-led company posted a robust 12% increase in net profits to Rs 6,318 crore on a standalone basis as the world’s largest refiner saw its margins improve to $10.4 a barrel, the highest in six years.Refinery business alone contributes to over three-fourths of RIL’s revenues and profitability. RIL shares fell 2% to close at Rs 1,025 in a weak Mumbai market on Friday. The results were declared after the closure of market hours.
The company saw its revenues fall by 28% to Rs 71,412 crore on a standalone basis and 23% to Rs 83,064 crore on a consolidated basis, primarily due to a 44% fall in crude oil prices.
Exports fell by 45% to Rs 36,717 crore in tandem with falling crude prices.

“RIL’s PAT is seen below the consensus level as despite superior performance from refinery and petchem business, disastrous performance of oil and gas segment and a flat performance of organized retail pulled down overall profitability,” investment adviser S P Tulsian told TOI, adding that businesses started by the company in the last one decade, like upstream, shale gas, organized retail and oil marketing outlets are now seen as a burden or may be seen a virtual write-off.
Ambani said that the company’s performance reflects the benefits of integrated hydrocarbon chain activities in a benign oil price environment. “The company’s world-scale petcoke gasification project and ethylene cracker are on track for planned start-up in 2016. We are also in the final lap of launch of our Jio services, which will bring about a positive transformation in the lives of millions of Indians,” he said.
RIL’s debt during the quarter increased by around Rs 10,000 crore to Rs 1,70,814 crore ($26.8 billion) against cash and cash equivalent of Rs 87,391 crore ($13.7 billion).