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Bloomberg
Reliance Industries Ltd.’s second-quarter profit rose 18 percent from a year earlier, buoyed by higher earnings from its petrochemicals business.
Net income for the operator of the world’s biggest oil-refining complex rose to 77.04 billion rupees ($1.2 billion) in the three months ended Sept. 30, the Mumbai-based company said Thursday in a stock exchange filing. That compares with a 72.4 billion-rupee average of 14 analyst estimates compiled by Bloomberg. Sales fell marginally to 643.4 billion rupees.
Mukesh Ambani-controlled Reliance is relying on profits from its core refining and petrochemicals business to help its new telecommunications venture, which it started in September. Reliance Jio Infocomm Ltd. spent 137 billion rupees to buy airwaves in the latest round of auctions this month.
Operating profit, or earnings before interest and tax, from its petrochemicals segment jumped 38 percent from a year earlier to 34.6 billion rupees, while that from its refining business increased 9.3 percent to 59 billion rupees. “The petrochemicals segment gained significantly from higher volumes, integration and supportive product margins,†Ambani said in a statement.
Refining Margins
The company’s two refineries in the western state of Gujarat, with a combined capacity of 1.24 million barrels a day, have the ability to turn cheaper, lower grades of crude into high-value products. Brent oil, the global benchmark, averaged about $47 a barrel in the quarter ended Sept. 30, 8.4 percent lower than a year earlier.
Reliance prices a majority of the fuels and chemicals it produces in U.S. dollars. A stronger greenback boosts earnings when converted to the Indian currency. The rupee averaged 66.96 per dollar during the quarter, down 3.2 percent from the previous year.
Reliance earned $10.10 for every barrel of crude it turned into fuels in the quarter, compared with $10.60 a barrel a year earlier and $11.50 a barrel in the three months ended June, the company said. Its earnings per share rose to 23.7 rupees from 20.1 rupees a year earlier.
Reliance shares closed little changed at 1,087.55 rupees in Mumbai, while the benchmark S&P BSE Sensex Index gained 0.5 percent.