Healthy margins raise RIL net 26%

Healthy refining margins saw India's largest private sector company Reliance Industries (RIL) posting a 26 per cent increase in its net profit for the quarter ended December 2007 over the corresponding previous quarter.

The company earned $15.4 a barrel from processing oil during the quarter compared with $11.7 in the corresponding previous quarter.

However, net profit grew 162 per cent to Rs 8,079 crore over the corresponding previous quarter on the back of a one-time gain of Rs 4,733 crore from the sale of a stake in its subsidiary Reliance Petroleum Ltd (RPL). 
 

RIL IN NUMBERS
(In Rs Cr)	Oct-Dec 2007	Oct-Dec 2006	% Change
Net Profit  (excluding exceptional item)	3882	3081	26
Net Profit	8079	3081	162
Total Income	34831	28315	23

The company gets the bulk of its revenue from crude oil refining and petrochemicals, but also has a presence in retail and textiles.

"I am happy to report that Reliance continues to surpass previous records in financial performance," said Mukesh D Ambani, chairman, Reliance Industries.

"The new growth platforms around oil and gas, organised retailing and agro-retail initiatives are gathering momentum and the initial response has been very encouraging. Each of these initiatives inherently addresses India's economic and social imperatives," he added.

The company's stock closed 3.3 per cent lower on the Bombay Stock Exchange on Thursday at Rs 2,996.25 against Wednesday's close of Rs 3,098.35.

Explaining the performance, a Mumbai-based analyst said, "The company saves money on crude cost (since its refinery can handle lower grades of oil which are much cheaper) and makes money in refining."

"Besides, being a private organisation, it does not have to bear any under-recoveries, which reflects well on its margins," the analyst added.

The company also announced that RPL's upcoming refinery at Jamnagar is expected to be completed ahead of its initial schedule of December 2008.

Reliance Petroleum's refinery, coming up next to RIL's 660,000 barrels per day refinery, will have a capacity to process 580,000 barrels per day.

During the nine-month period, the RIL refinery processed 23.7 million tonnes and achieved an operating rate of 96 per cent. Petrochemicals production grew 4 per cent to 14.5 million tonnes, against 14.0 million tonnes for the corresponding previous quarter.

In this period, RIL also acquired a majority stake in the operations of Gulf Africa Petroleum Corporation (GAPCO) and has started shipping products to the east African market.