EBM News English
Leading News Portal in English

Reliance Industries net profit gains by 13.5 per cent as oil business sees turnaround

MUMBAI: Mukesh Ambani-led Reliance Industries (RIL) on Friday posted a robust 13.5 per cent increase in net profit for the third quarter of FY20, earning Rs 11,640 crore, as a turnaround in its oil refining business and the steady rise in profitability of its retail and telecom ventures paid dividends.

However, the company’s revenues saw a decrease of 1.4 per cent year-on-year during the quarter, falling to Rs 1,68,858 crore from Rs 1,71,300 crore recorded in the corresponding period of the previous year. “The decrease in revenue is primarily on account of a 10.6 per cent decline in O2C business revenues, with lower product price realisation, and a 6.6 per cent fall in Brent crude prices. This was partially offset by continuing growth momentum in consumer businesses,” the company said.

“The third quarter results for our energy business reflect the weak global economic environment and volatility in energy markets. Within our O2C chain, downstream petrochemicals profitability was impacted by weak margins across products with subdued demand in well-supplied markets. Refining segment performance improved in a difficult operating environment given our continuous focus on cost positions, high operating rates and product placement,” added Ambani in a statement.

Despite a record production of 9.9 million tonnes, the petrochemical business saw pre-tax profit drop 28.5 per cent to Rs 5,880 crore on fall in product prices. But, RIL’s telecom and retail ventures have thrived.

During the quarter, the company opened 415 more retail stores and added 37.1 million subscribers to its Jio service, which helped increase profitability. The two segments now account for nearly 40 per cent of its EBITDA, up from close to 25 per cent last financial year.

The group’s telecom arm Reliance Jio posted a standalone net profit of Rs 1,350 crore, which was 62.5 per cent more than the previous year, while the retail business posted 58 per cent jump in pre-tax profit to Rs 2,389 crore and 27 per cent rise in revenue at Rs 45,327 crore.

The quarter also saw Jio crossing the Rs 5,600 crore quarterly EBITDA mark for the first time, and saw 40 per cent rise in data traffic growth and 30 per cent voice growth year-on-year. Meanwhile, RIL’s retail operations recorded footfalls of over 176 million customers, 42.6 per cent more than last year.