The Hindu Business Line : Reliance scores high on sales

RELIANCE Industries Ltd has registered a 41.6-per cent rise in its net profit for the quarter ended September 30, at Rs 2,481 crore against Rs 1,752 crore a year ago.

The rise in profits came mainly on the strength of higher sales at Rs 20,717 crore, up 28.1 per cent from Rs 16,164 crore in the corresponding period last year.

However, the RIL share closed on the BSE at Rs 751.20, down Rs 12.65 from the previous day close of Rs 763.85.

Lower refining margin: The strong performance came despite refining profits, which at Rs 1,532 crore, had only a 8.24-per cent margin against Rs 1,249 crore a year ago at a 9.62-per cent profit margin. The company had sales of Rs 18,595 crore from refining (Rs 12,980 crore) while petrochemicals sales accounted for Rs 8,171 crore (Rs 7,189 crore).

Reliance managed better profit margins (15.65 per cent) in its petrochemicals business at Rs 1,279 crore as against Rs 1,041 crore (14.48 per cent) in the corresponding previous quarter.

The company's interest payout during the quarter was significantly lower at Rs 222 crore (Rs 434 crore); it claimed a depreciation of Rs 804 crore (Rs 914 crore).

H1 net up 50 pc: For the six months, the turnover was Rs 42,777 crore, up 27 per cent, from Rs 33,610 crore in the corresponding previous period. Net turnover was Rs 38,501 crore (Rs 30,444 crore) and net profit was at Rs 4,791 crore, up 50 per cent, from Rs 3,189 crore.

Reliance said in a release that product prices grew 23 per cent just as its net operating margin was lower at 18.9 per cent during the first six months. The company attributed the lower margin to "significant increase in price of crude oil during the half year, which was not fully absorbed in domestic price of petroleum prices".

Exports up: The company continued its thrust in overseas sales, with exports including deemed exports rising by 51 per cent during the first six months at Rs 15,176 crore (Rs 10,036 crore).

Referring to its exploration and production activities, the company said: "RIL's oil and gas strategy is aimed at further enhancing the level of vertical integration in its energy business, and capturing value across the entire energy chain".

De-merger: The company said it has filed an application with the High Court of Mumbai to de-merge certain undertakings into four new resulting companies. Based on reports by international valuers, RIL has revalued plant, equipment and buildings situated at Patalganga, Hazira and Jamnagar as of August 1, 2005 at Rs 22,497 crore and an equivalent amount has been credited to revaluation reserve account.

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