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Mumbai / Bloomberg
Reliance Industries Ltd.’s fourth-quarter profit climbed 17 percent to the highest in more than eight years as oil’s collapse improved margins from turning crude into fuels and petrochemicals.
Net income at the operator of the world’s biggest refining complex increased to $1.1bn in the three months ended March 31 from 62.4 billion rupees a year earlier, the Mumbai-based company said in a stock exchange statement. That’s the highest since the quarter ended Dec. 31, 2007, and beat the 70.1bn-rupee mean of 15 analyst estimates. Sales fell 11 percent to 499.57bn rupees.
Higher profits from Reliance’s core businesses will help complete refining and petrochemical projects worth $15 billion. The company controlled by billionaire Mukesh Ambani is also investing a
similar amount to start a telecommunications service. Reliance’s refining margins — the profit from turning crude oil into fuels —was $10.8 a barrel, compared with $10.1 a year earlier and $11.5 in the three months ended December, the company said.
The two adjacent refineries in the western state of Gujarat have a combined capacity of 1.24 million barrels a day and have the ability to turn cheaper, lower grades of crude into high-value products.
Brent oil, the global benchmark, averaged about $35 a barrel in the quarter, 36 percent lower than a year earlier.
Group profit rose to 73.98 billion rupees in the period from 63.81 billion rupees a year earlier.
Reliance is expanding its petrochemicals capacity and investing in projects to reduce energy and feedstock costs to boost profits. The new projects may boost margins by $1.50 to $2 a barrel amid lower oil prices, according to Dhaval Joshi, a Mumbai-based analyst at Emkay Global Financial Services Ltd.