RIL reports 31% YoY jump in profit to Rs13,233 cr on BP investment

Reliance Industries Ltd (RIL) has reported a 30.97 per cent year-on-year rise in its consolidated net profit, at Rs13,233 crore, for the quarter ended 30 June 2020 thanks to a 54 per cent year-on-year growth in other income at Rs4,388 crore.

The energy-to-telecom conglomerate booked a one-time gain of Rs4,966 crore on an investment by British oil major BP in its fuel marketing business - Reliance BP Mobility Services.
At the same time, consolidated total income fell 42 per cent YoY to Rs 95,626 crore. The company said the group’s operations and revenues for the quarter were impacted by the Covid-19 disruption.
Consolidated Ebitda declined 11.80 per cent YoY to Rs 21,585 crore agaist Rs 24,486 crore reported for the same period last year.
RIL’s revenues from the petrochemicals business declined 33 per cent YoY to Rs25,192 crore, primarily due to lower price realisations due to the Covid-19 disruptions in local and regional markets. The segment’s EBIDTA declined 49.7 per cent YoY to Rs4,430 crore.
“Weak domestic demand and higher share of exports impacted margins compared with regional benchmarks. The impact of lower realisation was partially offset by cost optimisation and integration benefits,” RIL said.
In fact, it was a combination of the increasing demand for its digital services and strong growth of its retail unit that helped RIL to ride out a tough quarter with better-than-expected earnings.
RIL’s telecom arm Reliance Jio Infocomm reported 182.82 per cent YoY growth in net profit at Rs2,520 crore for the quarter against Rs891 crore reported in the same quarter of the previous year.
Jio’s revenue from operations jumped 33.70 per cent to Rs16,557 crore while EBITDA grew 55.40 per cent to Rs7,281 crore,. Jio's ARPU growth of 7.4 per cent QoQ at Rs140.3 per subscriber per month.
"The severe demand destruction due to global lockdowns impacted our hydrocarbons business but the flexibility in our operations enabled us to operate at near normal levels and deliver industry leading results," Mukesh Dhirubhai Ambani, chairman and managing director said.
Reliance Retail, however, witnessed a 17.20 per cent YoY fall in revenue at Rs 31,633 crore. EBITDA declined 47.40 per cent YoY to Rs 1,083 crore.
The company said Reliance Retail’s EBITDA was positive and resilient despite the limitations of the quarter, and cost management initiatives led to savings on fixed cost, which in turn helped cushion the impact of lower profits from lower sales.
"Our consumer facing businesses became the life-line for individuals and businesses with our Retail and Jio teams working hard to ensure millions got essential goods and services through the lockdown," he added.
Consolidated profit in March quarter 2020 stood at Rs6,348 crore and Rs 10,141 crore in the corresponding period of last year.
In the March quarter, the company had reported an exceptional loss of Rs4,267 crore due to fall in oil prices. Profit before the exceptional item was at Rs10,813 crore.
Reliance's consolidated revenue for the quarter stood at Rs1,00,929 crore compared to Rs1,51,461 crore QoQ and Rs1,74,087 crore year-on-year.
The company also managed to bring down total expenditure by about 42 per cent YoY to Rs87,406 crore from Rs1,50,858 crore in Q1FY20.
The company managed to bring down total expenditure by about 42 per cent YoY to Rs 87,406 crore from Rs 1,50,858 crore in Q1FY20.
Ambani said Reliance Industries completed the largest fund raise in Indian Corporate history in this quarter. I thank the millions of individual investors who supported our Rights Issue and welcome all our new partners to an exciting new phase of growth at Reliance.”
RIL's digital unit Jio Platforms, which raised Rs1,52,056 crore during the quarter under review from some of the world’s top tech investors led by Facebook, was one of the few companies to have grown during the coronavirus lockdown.
With the fund raising from stake sale in Jio Platforms, Rights issue of Rs 53,124 crore and stake sale to BP in petro-retail joint venture, Reliance achieved its net debt free target in June 2020, which is well ahead of its timeline 31 March 2021.
Reliance Industries said it, post completion of these investments, would hold 66.48 percent equity stake in Jio Platform on a fully diluted basis.
"Of the total investment, Jio Platform Limited has already received Rs  1,15,694 crore as subscription amount from ten investors. Rs 22,981 crore will be retained at Jio Platform to drive future growth," it added.