Reliance Industries posts record Q3 profit at Rs 11,640 crore; revenue down 1.4%

India's most-valued company Reliance Industries reported a 13.5 per cent rise in net profit for the quarter ended December 31, 2019, after a turnaround in oil refining business coupled with the continued rise of retail and telecom arms. In a regulatory filing on Friday, Mukesh Ambani-led oil-to-telecom conglomerate declared consolidated net profit of Rs 11,640 crore for the quarter under review, as opposed to Rs 10,251 crore in the corresponding quarter last year.

This is the highest quarterly net profit earned by any private company, surpassing its own previous best of Rs 11,262 crore in the July-September 2019 period.

In Q3 of FY19, RIL posted consolidated revenue of Rs 1.68 lakh crore in comparison to Rs 1.71 lakh crore in the same period last fiscal.

While oil refining margins rose after six straight quarters of decline, the company opened 415 more retail stores and added 3.7 crore subscribers to its Jio mobile phone service that helped increase the profitability of the venture. But the weakness in its traditional petrochemical businesses continued.

The operator of the world's largest oil refining complex saw pre-tax earnings from the business rise 12 per cent to Rs 5,657 crore in the third quarter of the current fiscal year.

It earned $9.2 on turning every barrel of crude oil into fuel as compared to a gross refining margin (GRM) of $8.8 per barrel in the October-December 2018. The GRM was, however, lower than $9.4 per barrel earned in July-September 2019.

"The third quarter results for our energy business reflects the weak global economic environment and volatility in energy markets. Within our O2C chain, downstream petrochemicals profitability was impacted by weak margins across products with subdued demand in well-supplied markets. Refining segment performance improved in a difficult operating environment given our continuous focus on cost positions, high operating rates and product placement," RIL Chairman and MD Mukesh Ambani said.

Reliance reported record pre-tax profit from its retail and telecom businesses. The two segments now account for nearly 40 per cent of its EBITDA, up from close to 25 per cent last financial year. With its retail store strength rising to 11,316 from 10,901 at the end of the second quarter, the retail business posted a 58 per cent jump in pre-tax profit to Rs 2,389 crore and a 27 per cent rise in revenue at Rs 45,327 crore.

Despite repeating record production of 9.9 million tonnes, the petrochemical business saw pre-tax profit drop 28.5 per cent to Rs 5,880 crore on fall in product prices. Reliance's twin refineries at Jamnagar in Gujarat processed 18.1 million tonnes of crude oil, marginally higher than 18 million tonnes a year back.

Loss in the oil and gas exploration and production business widened to Rs 366 crore from Rs 185 crore in October-December 2018.

Reliance Jio reported a 62.5 per cent year-on-year rise in net profit for the quarter ended December 31, 2019. The telecom arm of Reliance Industries posted a standalone net profit of Rs 1,350 crore during the quarter under review, as opposed to Rs 831 crore during the year-ago period. Reliance Jio's standalone revenue from operations for the December quarter stood at Rs 13,986 crore, 28.5 per cent higher than Rs 10,885 crore reported during the corresponding period last year. The December quarter saw Reliance Jio subscriber base reaching 37 crore, up 32.1 per cent year-on-year, with net addition of 1.48 crore during Q3.

In August 2019, Ambani had announced plans to sell a fifth of the O2C business to Saudi Aramco for a valuation of USD 75 billion. The deal is expected to close next year. Having completed its major investment cycle, Reliance said its outstanding debt rose to Rs 306,851 crore as on December 31, 2019, from Rs 291,982 crore as on September 30, 2019, and Rs 187,505 crore in March-end. Cash-in-hand increased to Rs 153,719 crore from Rs 134,746 crore at the end of the September quarter.

Also read: Reliance Jio Q3 profit up 62.5% to Rs 1,350 crore; revenue rises 28.5%

Edited by Manoj Sharma with PTI inputs