RIL reports record Q4 net profit of Rs7,398 crore as margins spurt

Mukesh AmbaniReliance Industries today reported a 16-per cent jump in its net profit for the fiscal fourth quarter ended 31 March, earning a record Rs7,398 crore ($1.1 billion), on the back of higher refining and petrochem margins.

Consolidated net profit rose 15.9 per cent to Rs7,398 crore in January-March 2015-16, against Rs6,381 crore in the same period a year ago, the company stated in a release.

RIL's consolidated net profit for the fiscal year ended 31 March 2016 rose 17.2 per cent to Rs27,630 crore from Rs23,566 crore in the previous financial year.

''FY 2015-16 has been a year of outstanding achievement for our downstream hydrocarbon businesses, notwithstanding persisting global economic uncertainty," Mukesh Ambani, chairman and managing director, Reliance Industries, stated in a company release.

"Looking ahead, we are focused on ensuring a flawless start- up and stabilisation of the new growth platforms across our hydrocarbon and consumer businesses. The commercial roll-out of our Jio services this year will digitally enable a billion Indians and propel growth for India and Reliance,'' Ambani said.

RIL, on an average, has been earning $10.8 on refining every barrel of crude during the January-March 2016 quarter compared with a gross refining margin (GRM) of $10.1 in the fourth quarter of 2014-15.

RIL's GRM for the year stood at $ 10.8 a barrel against $8.6 per barrel in the previous year. RIL's GRM outperformed Singapore complex margins by $3.3 per barrel, the highest level achieved in the past seven years.

Reliance said FY16 revenue from the refining and marketing segment decreased by 30.9 per cent year-on-year to Rs234,946 crore ($35.5 billion), reflecting a sharp fall in average crude oil prices during the year.

Refining EBIT, however, increased by 49.1 per cent to a record Rs23,598 crore, on the back of seven-year-high refining margins and record crude throughput of 69.6 MMT (at 112 per cent capacity).

At $10.8 per barrel of crude, the company is making a profit of around 30 per cent on each barrel of crude it refines.

The company said its consolidated profit before depreciation, interest, and taxes (PBDIT) for the quarter rose 16.9 per cent to a record Rs13,994 crore.

Fourth quarter FY16 revenues for the oil and gas segment decreased 34.8 per cent to Rs1,638 crore on the back of lower upstream production in domestic blocks coupled with sharply lower oil and gas prices in both the domestic and US shale segments.

FY16 revenue from the oil and gas segment decreased by 34.7 per cent to Rs7,527 crore ($1.1 billion), reflecting the low commodity price environment. The segment EBIT for the year declined sharply by 88.1 per cent to Rs378 crore ($ 57 million). The segment profitability was impacted by lower oil and gas price realisations and decrease in domestic upstream volume. US shale operations were impacted by low commodity prices despite marginally higher volumes.

RIL's retail business achieved sales of Rs5,781 crore during the quarter, up 21 per cent year-on-year, with EBIT of Rs131 crore up 26 per cent.

For FY16, Reliance Retail reported a turnover of Rs21,612 crore against Rs17,640 crore during the same period last year, recording a robust growth of 22.5 per cent. Revenue CAGR over the last five years has sustained at 29 per cent. The business delivered highest ever PBDIT of Rs891 crore in FY16 as against Rs784 crore in the previous year.

Reliance Retail added 624 stores across various store concepts translating into a store opening rate of 12 stores per week denoting the accelerated store opening programme which the business has implemented during the year. As of 31 March 2016, Reliance Retail operated 3,245 stores across 532 cities.