RIL Q3 profit falls 12% QoQ as crude price decline hurts margins

Reliance Industries posted a consolidated profit of Rs 5,256 crore down 12 percent quarter-on-quarter (QoQ), as a steep decline in crude oil prices hurt the company’s core refining business. Consolidates turnover came in at Rs 96,330 crore down 15 percent QoQ.  On a consolidated basis refining EBIT margins grew to 4 percent vs 3.7 percent, Petchem EBIT margins were flat at 9 percent and Oil & Gas EBIT margins were 29 percent vs 27 percent QoQ, a company release said. Gross refining margins (GRM) for the company declined sharply to $7.30/bbl against $8.30/bbl QoQ as well. The net profit on a standalone basis was Rs 5,085 crore was in line with CNBC-TV18’s poll Of Rs 5,000 crore while sales came in at Rs 80,196 crore and EBITDA margin was 9 percent. Profit stood at Rs 5,742 crore, sales Rs 96,486 crore and EBITA margins at 8.5 percent in Q2. On a standalone basis, refining EBIT margins grew to 4.4 percent vs 4.1 percent, Petchem EBIT margins were flat at 10 percent and Oil & Gas EBIT margins were 20 percent vs 24 percent all on a QoQ basis. Standalone other income stood at Rs 2,402 crore vs Rs 2,140 crore QoQ Reliance Industries Limited, chairman and managing director, Mukesh Ambani was of the view that the firm did well despite global challenges particularly in the oil and gas sector. “Our focus on operational efficiency and the superior configuration of assets helped us deliver an industry-leading performance in the refining and petrochemicals business despite sharp decline in crude and feedstock prices. The performance also highlights the robustness of our risk management and proficiency of people and processes across the integrated chain,” he said. Commenting on the way forward, Ambani said, “We continued to advance our refining and petrochemicals business capital investments, which will come to fruition over the next 4-6 quarters. These investments demonstrate our commitment to creating value through the business cycle. During the quarter, Reliance Retail registered Y-o-Y growth of 19% in turnover with improved margins and profitability.”