Reliance Industries (RIL) on Monday reported a 4.8% decline in its year-on-year consolidated net profit at Rs 16,563 crore during the July-September quarter, missing Bloomberg consensus estimate of Rs 18,814 crore, as its oils-to-chemicals business underperformed once again.
However, digital services performed well and registered growth, partially offsetting the weak performance by the O2C segment. Retail business posted muted performance.
This is the sixth straight quarter when RIL’s profit missed the Street estimates dragged down by the O2C business.
Consolidated revenues during the period rose marginally by 0.2% to Rs 2.35 lakh crore, which was a tad below estimates of Rs 2.36 lakh crore. Ebitda at Rs 39,058 crore, was down 4.7% and also below Bloomberg estimate of Rs 40,324 crore. Margin contracted to 16.6% from 17.4 in the same period last year.
“Our performance reflects robust growth in digital services and upstream business. This helpedpartially offset weak contribution from oil-to-chemicals business which was impacted by unfavourable global demand-supply dynamics,” chairman and managing director, Mukesh Ambani said in a statement.
Finance cost during the quarter increased 5% YoY to Rs 6,017 crore on the back of higher debt. The company’s net debt as of September was Rs 1.16 lakh crore. Consolidated gross debt was Rs 3.36 lakh crore, higher than Rs 2.95 lakh crore a year ago. Capital expenditure for the quarter stood at Rs 34,022 crore.
The company’s mainstay, the oils-to-chemicals business reported poor operational performance as Ebitda was down by around 24% YoY to Rs 12,413 crore. This was mainly due to unfavourable demand-supply balance, which led to a sharp 50% decline in transportation fuel cracks and continued weakness in downstream chemical deltas.
The segment revenue, however, increased 5% YoY to Rs 1.55 lakh crore primarily on account of higher volumes and increased domestic placement of products.
Depreciation for the business, too, was higher due to accelerated depreciation for catalyst and equipment replaced during planned shutdown.
Global refinery crude throughput was lower by 0.5 mb/d YoY at 82.3 mb/d during the quarter. The total throughput for the segment rose by a marginal 1% YoY to 20.2 mmt.
The domestic polymer and polyester demand declined by 5% and 7% respectively due to seasonal factors.
Revenue for the oil and gas segment was lower by 6% YoY due to lower price realisation partly offset by an increase in gas and condensate volumes in KGD6 and CBM field. The average price realised for KGD6 gas was $9.55 per mmbtu during the quarter. The average price realised for CBM gas was $11.4 per mmbtu. Ebitda during the quarter increased to Rs 5,290 crore, up 11% YoY, however margins were at 85%.
The first of its new energy giga-factories is on-track to commence production of solar PV modules by the end of this year, Ambani said, adding, “With a comprehensive range of renewable solutions including solar, energy storage systems, green hydrogen, bio-energy and wind, the new energy business is poised to become a significant contributor to global clean energy transition”.
In an earnings briefing, Srikanth Venkatachari, chief financial officer, “O2C business was hit by unfavourable demand and supply scenario and lower cracks. Oil and gas sustained volume growth”.
On Monday, RIL shares closed up 0.03% at Rs 2,745.5 on the NSE. The results were declared post market hours.
From: financialexpress
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