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Mr Mukesh Ambani

Our Bureau

Mumbai, Oct 18 Led by higher refining margins and robust profitability of its petrochemicals business, Reliance Industries’ net profit for the second quarter of the current fiscal rose 28 per cent.

Total turnover for the quarter rose 6 per cent.

The company’s results were also plumped up by the amalgamation of Indian Petrochemicals Corporation Ltd with itself during this fiscal.

Gross refining margin per barrel of crude was $13.6 per barrel during the quarter (sequentially lower from $ 15.4), against $9.1 a barrel in the year-ago quarter.

Refining and marketing accounted for 63 per cent of the quarterly revenues of the company.

Turnover from refining and marketing was higher by 2 per cent, but earnings before interest and tax was higher by 56 per cent. EBIT margins rose to 9.8 per cent, from 6.4 per cent a year ago.

EBIDTA for the company as a whole rose 15 per cent for the quarter.

The company’s more value-added business, the petrochemicals activity, which accounted for 35 per cent of revenues, brought in 43 per cent of its EBIT. However, the EBIT margin from this business was at 15.6 per cent, lower than 16.3 per cent a year ago. High feedstock prices impacted the business, it said.

However, there was strong domestic demand which gave the company the flexibility to pass on the increase in petrochemical prices, said a news release from RIL.

The company said it also profited from higher exports for the half-year as a whole. A lower incidence of sales tax on account of higher exports and exchange differences led to a decrease in “other expenditure” said the company.

Staff costs for the quarter were lower at Rs 471 crore (Rs 496 crore). Interest and finance charges at Rs 257 crore (Rs 297 crore) were also lower.

Oustanding debts were at Rs 28,607 crore in September 2007, against Rs 27,826 crore six months ago. RIL’s net gearing has decreased to 23 per cent, against 25.2 per cent half a year ago.

The company has incurred capital expenditure of Rs 7,722 crore during the fiscal so far, it said.

RIL shares declined by Rs 114.4 or 4.25 per cent on the BSE, to close at Rs 2,575.9 on Thursday.

More Stories on : Financial Performance | Petroleum | Reliance Industries Ltd

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