RIL Q2 result: Reliance Industries consolidated net profit up 17.4% at Rs 9,516 crore

RIL Q2 result: Reliance Industries Ltd (RIL) has posted a consolidated net profit of Rs 9,516 crore up 17.4% (YoY) in quarterly profit in its September quarter (Q2). RIL reported quarterly consolidated revenue of Rs 156,291 crore ($21.6 bn), up 54.5%, even as quarterly segment revenue of digital services crossed Rs 10,000 crore. It also revealed a record quarterly EBIT for petrochemicals, retail and that digital services Jio subscriber base crossed 250 million mark.

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: “Our Company delivered robust operating and financial results for the quarter despite macro headwinds, with strong growth in earnings on Y-o-Y basis. Our integrated refining and petrochemicals business generated strong cash flows in a period of heightened volatility in commodity and currency markets. Our world-class petrochemicals assets contributed record earnings; endorsing benefits of diversified feedstock, integration and superior product portfolio. Use of ethane feedstock at Nagothane cracker from this quarter has further enhanced feedstock optionality."

"Our commitment to create consumer value is gathering momentum, with the robust scale-up of Indiacentric consumer facing businesses. The financial performance of both Retail and Jio reflect the benefits of scale, technology and operational efficiencies. Retail business EBITDA has grown three fold on Y-o-Y basis whereas Reliance Jio EBITDA has grown nearly 2.5 times. Jio has now crossed 250 million subscriber milestone and continues to be the largest mobile data carrier in the world,” he added.  

The RIL statement also puts forth financial performance and analysis of the result: 
 
According to the RIL statement, for the quarter ended 30th September, 2018, RIL achieved revenue of Rs 156,291 crore ($ 21.6 billion), an increase of 54.5% as compared to Rs 101,169 crore in the corresponding period of the previous year. Increase in revenue is primarily on account of higher price realizations of petrochemical and refinery products led by 44.5% increase in Brent crude price. Increased revenues also reflect higher volumes with the commissioning and ramp-up of new petrochemical facilities. Retail business and Digital Services business also recorded a sharp 121% and 52% increase in revenue during the quarter compared to the corresponding quarter of the previous year. 
 
Exports (including deemed exports) from RIL’s India operations were higher by 45.5% at Rs60,460 crore ($ 8.3 billion) as against Rs41,560 crore in the corresponding period of the previous year due to higher petrochemical product volumes and higher product prices in petrochemical and refining business. 
 
Other expenditure increased by 52.6% to Rs 18,809 crore ($ 2.6 billion) as against Rs 12,323 crore in corresponding period of the previous year primarily due to higher power & fuel expenses on account of commissioning of petrochemical projects at Jamnagar and increase in fuel prices. Increase in other expenses also reflect the rapid scale-up of consumer businesses, mainly on account of higher network operating expenses, access & regulatory charges and selling expenses. 
 
Operating profit before other income and depreciation increased by 35.6% to Rs 21,108 crore ($ 2.9 billion) from ` 15,565 crore in the corresponding period of the previous year. Record operating performance was led by significant volume growth and margin improvement in petrochemicals business and multi-fold growth in contribution from Retail and Digital Services businesses. 
 
Depreciation (including depletion and amortization) was Rs 5,229 crore ($ 721 million) as compared to Rs 4,287 crore in corresponding period of the previous year. The increase was primarily on account of capitalization of projects in the petrochemicals business during previous period and also RJIL’s Wireless Telecommunication Network. 
 
Finance cost was at Rs 3,932 crore ($ 542 million) as against Rs 2,272 crore in corresponding period of the previous year. This increase is primarily on account of commencement of petrochemical projects at Jamnagar and Digital Services business. Higher loan balances also contributed to the increase in finance cost. 
 
Profit after tax was higher by 17.4% at Rs 9,516 crore ($ 1.3 billion) as against Rs 8,109 crore in the corresponding period of the previous year.  
 
Basic earnings per share (EPS) for the quarter ended 30th September, 2018 was Rs 16.1 as against  Rs 13.7 in the corresponding period of the previous year. 
 
Outstanding debt as on 30th September, 2018 was Rs 258,701 crore ($ 35.7 billion) compared to Rs 218,763 crore as on 31st March, 2018. 
 
Cash and cash equivalents as on 30th September, 2018 were at Rs 76,740 crore ($ 10.6 billion) compared to Rs 78,063 crore as on 31st March, 2018. These were in bank deposits, mutual funds, CDs, Government Bonds and other marketable securities.  
 
The average exchange rate (Rs / US$) in this quarter was 70.03, a depreciation of 8.9% in the compared to corresponding period of the previous year. This has impacted costs and capital expenditure during this period that has been off-set by higher realization. 
 
The capital expenditure for the quarter ended 30th September, 2018 was Rs 39,239 crore ($ 5.4 billion) including exchange rate difference.  

Watch this Zee Business video

RIL retained its domestic credit ratings of “CRISIL AAA/Stable” from CRISIL and “IND AAA/Stable” from India Ratings and an investment grade rating for its international debt from Moody’s as “Baa2” and “BBB+” from S&P.