RIL sparkles with 28 per cent increase in net

Riding on high crude oil refining margins, the country's largest private sector company Reliance Industries Ltd (RIL) posted a 28 per cent increase in net profit to Rs 3,837 crore for the second quarter ended September 30this year.

Last year's profit for the same period was Rs 3,000 crore, which was restated to account for the amalgamation of its unit IPCL.

Total sales during the period were up 6 per cent at Rs 33,402 crore.

"Reliance had another quarter of record earnings," RIL Chairman Mukesh Ambani said in a statement, adding that "investments in exploration and production (E&P), organised retail and development of special economic zones will be the cornerstones for growth".

Profit from refining and chemicals increased as oil prices in Singapore rose faster than the Asian benchmark Dubai crude.

Refining accounted for over 60 per cent of the gross revenues during the quarter in which Reliance extended its global footprint with the acquisition of Gapco in East Africa and Hualon's assets in Malaysia.

RIL had a gross refining margin (GRM) of $13.6 per barrel for the second quarter compared with $9.1 per barrel in the same period last year.

Reliance's performance counters US rivals such as Valero Energy Corp and Chevron Corp, which last week said third-quarter profit declined because of lower earnings from processing oil into fuels. Reliance's gasoline and diesel are used in the US and Europe.

The company's chemicals business, which accounts for about 35 per cent of the revenue, boosted earnings in the quarter. Prices of polyester have risen 8.5 per cent in the nine months ended September 30 from a year earlier.

RIL's shares closed 4.25 per cent down on the Bombay Stock Exchange today at Rs 2,575.90.

For the half year period ended September 30 this year, the total income was Rs 64,692 crore, reflecting a growth rate of 9 per cent over the corresponding period last year. Exports were higher by 11 per cent at Rs 37,074 crore.

Operating profit before other income increased by 18 per cent from Rs 9,697 crore to Rs 11,454 crore and the net operating margin was 18.6 per cent as compared with 17.3 per cent in the corresponding period of 2006.

Basic earning per share (EPS) for the half year was Rs. 51.40 against Rs 39.30 for the corresponding period of last year.

During the half year period, RIL's refinery processed 16.1 million tonnes of crude, an increase of 3 per cent with an operating rate of 98 per cent.

Petrochemicals production grew by 7 per cent to 9.8 million tonnes, against 9.1 million tonnes a year earlier. Oil production from the Panna Mukta and Tapti blocks increased by 24 per cent to 305,000 tonnes and gas production increased by 42 per cent to 678 million metric standard cubic meters (MSCM).