Reliance profits up, gas production down

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April 21: India’s largest private sector firm Reliance Industries on Thursday declared a higher net profit, but that wasn’t enough to calm jittery investors. Although the company made more money in its core business of oil refining, it has seen production of natural gas from the KG-D6 fall sharply over the past few quarters.

Those worries have still not been addressed adequately — the 29 page result note from the company makes no mention of steps being taken to restore gas production. Meanwhile, the company also announced a fresh gas discovery in the deepwater Cauvery-Palar basin on the east coast as well. The company had won the exploration rights to this block in the third round of NELP.

For the March quarter, RIL has recorded a net profit of Rs 5,376 crore, up 14 per cent over the corresponding period last year. For the full year, the company has recorded a net profit of Rs 20,286 crore — just a shade under $5 billion. Sales turnover for the year is Rs 2.58 lakh crore, up 29 per cent over the last year. The increase in profitability is because of better margins in the core business of oil refining — converting crude oil into fuels such as diesel, petrol and LPG. The company made $9.2 for every barrel of oil it processed during the quarter, against $7.5/barrel for the fourth quarter last year. However, in terms of volumes, there was very little difference as the company is operating at the same capacity as it was at last year. Margins from the petrochemical business were also slightly higher than the last year.

Amongst the other businesses, Reliance Retail started 90 new retail outlets. The company now has a total of 160 retail stores. The company now has partnerships with leading international names such as Marks & Spencers, Hamleys and Diesel.