Reliance Industries on Friday reported a bigger-than-expected 18 percent jump in June quarter net profit on account of highest refining margin in eight years and robust petrochemical earnings.
Consolidated net profit at Rs 7,113 crore, or Rs 24.1 per share, in the April-June period was 18.1 per cent higher than Rs 6,024 crore in the same period of last fiscal, RIL said in a statement.
This was the ninth consecutive quarter for which the company posted highest segment profit for refining and petrochemical business.
RIL, which has in recent years invested in sectors like telecom, retail and financial services as it seeks to diversify revenue sources and reduce dependence on the oil and gas sector, however did not give any guidance on commercial launch of its 4G telecom and high-speed broadband services.
Revenue fell 13.4 per cent to Rs 71,451 crore, hurt by a sharp fall in prices of crude oil and petroleum products.
RIL, operator of the world's biggest oil-refinery complex that can process low-grade crude and switch between fuels depending on market prices, earned $11.5 on turning every barrel of crude into petroleum product.
This was the highest gross refining margin it has earned in eight years, as against USD 10.8 per barrel in preceding January-March quarter and $10.4 in the first quarter of 2015-16 fiscal.
Analysing the earnings, CFO Alok Agarwal said that the company saw an absolutely brilliant quarter in April-June.
"It is safe to say that the commodity markets started to see recovery from the volatility we had seen last year," he said.
Crude oil averaged about $46 per barrel during the last quarter, up nearly 50 percent from the bottom of just under $30. Gas prices are between $2.6 and $2.7 per million btu, nearly twice their low seen earlier.
He also mentioned the stability in exchange rate at roughly 67 average against the dollar during the quarter.
However, according to him the more interesting part is the global oil demand.
"We saw 1.7 million barrels of oil demand growth in 2015. The latest estimates for 2016 and 2017 have been revised up. It is now estimated that we will see 1.4 million barrel growth in 2016 and followed by perhaps 1.3 million barrels in 2017," he said.
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With inputs from PTI
(Disclosure: Firstpost is part of Network18 Media & Investment Limited which is owned by Reliance Industries Limited.)
Published Date: Jul 15, 2016 19:54 PM | Updated Date: Jul 15, 2016 20:12 PM