RIL Q3 net profit down 15%

Company falters after 10 quarters, records 2.3% rise in net sales.

After registering steady growth in 10 consecutive quarters, Reliance Industries today announced a 15 per cent drop in its net profit for the quarter ended December 2005, over a 2.3 per cent rise in net sales.

The country's largest private sector company posted a net profit of Rs 1,776 crore, down from Rs 2,091 crore in the corresponding quarter last year. Profit before tax went down 14.61 per cent to Rs 2,138 crore from Rs 2,504 crore.

Its net sales during the period went up marginally from Rs 17,768 crore to Rs 18,168 crore. Earnings per share (EPS) stood at Rs 12.7, down from the previous corresponding period's Rs 15.

Although the results were announced after trading hours on bourses, the Reliance stock lost 1.78 per cent to close at Rs 893.55 on the Bombay Stock Exchange on the expectation that the company would post a 6-7 per cent drop in its net profit.

Other income went down by 45.6 per cent to Rs 180 crore from Rs 331 crore. Expenditure increased by 4.9 per cent to Rs 15,192 crore from Rs 14,478 crore. Of this, the raw material cost rose by 5.3 per cent to Rs 13,358 crore.

The reduction in net profit was mainly due to the drop in profit before interest and tax (PBIT) from refining. The company's refining PBIT reduced almost 46 per cent to Rs 856 crore from Rs 1,576 crore.

The reduction could be attributed to the closure of refinery in October and November. Due to the closure, the company managed to process 6.70 million tonne crude, down from 7.95 million tonne in the corresponding period of the last year.

Profit before interest and tax from petrochemicals and refining stood at Rs 1064 crore (Rs 852 crore) and Rs 320 crore (Rs 268 crore), respectively.

According to the segment revenue of the company, refining revenue went up 13 per cent to Rs 15,179 crore from Rs 13,415 crore. Petrochemicals' revenue increased by 4.8 per cent to Rs 7353 crore from Rs 7,015 crore. The company today announced that it had set up over 1,000 retail outlets.

"The response from these retail outlets is encouraging as the throughput per outlet is significantly higher than the industry norms," it added.