Country's most valued company Reliance Industries (RIL) today reported 6.4 per cent drop in net profit for the second quarter this fiscal as refining margins tumbled following crude oil's fall from a record.
RIL reported a profit of Rs 3,852 crore for the July- September quarter, down from Rs 4,116 crore in the same period a year ago, the company said in a statement here.
The company earned $6 on processing of every barrel of crude oil at its giant refining complex at Jamnagar, less than half of $13.3 per barrel gross refining margin (GRM) in the second quarter of previous fiscal.
Weak global demand particularly in the US and Europe -- the export markets for RIL's twin refineries -- has led to squeeze in profit margins for refiners.
"The timely completion of the new SEZ refinery and the deep-water, oil and gas KG D-6 block and their safe and stable ramp up are noteworthy accomplishment for the company," RIL Chairman and Managing Director Mukesh D Ambani said.
Turnover rose 6.1 per cent to Rs 48,843 crore mostly because of revenue it earned from sale of gas from its eastern offshore KG D-6 fields and limited exports from its new, only-for-exports refinery.
On anticipation of second quarter figures, shares of RIL today closed 1.56 per cent down on BSE at Rs 2,003.85 in a falling market.
The index heavyweight had gained nearly 9 per cent during the July-September quarter, when the Sensex gained 39 per cent.
"These projects (KG D6 gas fields and only-for-exports refinery) have contributed meaningfully in RIL achieving a record level of profits despite the challenging business and economic environment," Ambani said.
"These projects will make a significant contribution in shaping the earnings of RIL and also play a vital role in changing the energy landscape in India."
In a short span of 6 months, total gas production from KG-D6 has ramped up to over 40 million standard cubic meters per day. "This is one of the fastest ramp-up in gas production amongst the deepwater fields worldwide," the statement said.
All the 18 wells of KG-D6 are ready for production but only 16 wells are currently producing in absence of government nominated buyers.
The KG D-6 block also produced 222,104 tonnes of crude oil, the statement said, adding the company earned Rs 2,937 crore from sale of oil and gas during the quarter.
RIL said its twin refineries at Jamnagar operated at nearly 90 per cent of the capacity. They processed 27.63 million tonnes of crude compared to 16.34 million tonnes a year ago. The GRM and crude processing this year is for combined units of old 660,000 barrels per day unit and the new only-for-exports 580,000 bpd refinery. Last year's numbers were for only the old unit (J-1) as the new came into operations only this year.
