RIL Q3 net profit down 13.5%

RIL Q3 net profit down 13.5%

GRM dips to $6.8/bbl, revenue at Rs 87,480 crore, up 40%

Mukesh Ambani Group’s flagship company Reliance Industries (RIL), on Friday, reported a 13.5 per cent decline in its net profit at Rs 4,440 crore for quarter ended December 2011 (Q3) against Rs 5316 crore in the same quarter last fiscal. 

Even as analysts in D-Street predicted dismal results, the numbers announced by RIL was even below market expectations of Rs 4,500-4,700 crore. RIL’s gross refining margin (GRM) during the quarter took a dip to $6.8/bbl from $9.0/bbl in the comparable quarter of previous fiscal. Experts point out the company’s refining margin in the current quarter was below the Singapore benchmark which was about US$8/bbl.

RIL Chairman Mukesh Ambani said: The global nature of our businesses and weakness in economic conditions resulted in reduced earnings in the quarter, particularly in our refining and petrochemicals businesses. Notwithstanding these challenges, the company has delivered reasonbly robust results with operating leverage.

In the Q3 RIL’s total income at Rs 87,480 crore, however, was 40 per cent higher than Rs 62,399 crore in Q3 last year. For nine months ended December 31, 2011, RIL achieved a turnover of Rs 251,958 crore, an increase of 37.4 per cent on a year-on-year basis.

Increase in volumes accounted for 3.9 per cent growth in revenue and higher prices accounted for 33.5 per cent growth in revenue.  Profit after tax was Rs 15,804 crore as against Rs 14,910 crore for the corresponding period of the previous year.  RIL’s exports were higher by 55.2 per cent at Rs 156,753 crore as against Rs 100,995 crore in nine months ended FY10-11. Higher crude prices resulted in consumption of raw materials increasing by 50.6 per cent to Rs 203,294 crore on a year-on-year basis.

Interest cost was higher at Rs 1,899 crore as against Rs 1,632 crore in 9M FY 2010-11 principally due to higher foreign exchange difference. The company’s gas production from KG D6 basin has been on a steady fall after briefly touching 80 MMSCMD in December 2009. RIL’s cash pile continues to bulge, which is a good thing for its balance sheet.

Shares buyback @ Rs 870

The Board of Directors of Reliance Industries (RIL), at its meeting, on Friday, also approved the buyback of its equity share at a price of Rs 870 per share. It has decided to buyback up to 12 crore fully paid up equity shares of Rs 10 each, payable in cash, up to an amount not exceeding Rs 10,440 crore from the open market transactions through stock exchange(s).

This maximum buyback at a price mentioned above represents a nearly 10 per cent premium over the last closing price of Rs 792.65 on January 20, 2012.

RIL’s last buy back program was in 2004 at Rs 285 per share and it was then kept at Rs 2,999 crore -- about 10 per cent of the share capital plus free reserves as of March March 31, 2004.

The buyback programme of RIL then lasted for nine days and to the tune of Rs 150 crore, which was equivalent to 5 per cent of the company’s total buyback size then.

As of now, controlling shareholders in RIL own 44.71 per cent of the stock.

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