 "Reliance Industries net profit up 15.8 pc to Rs 5,703 cr")
**New Delhi:**Reliance Industries Ltd (RIL)today reported nearly 16% rise in net profit for thesecond quarter this fiscal as higher earnings from oilrefining and petrochemicals business helped it offset a dip innatural gas production.
The net profit was up 15.8% at Rs 5,703 croreduring July-September - RIL’s highest quarterly profit since2007, the company said in a press statement.RIL said its showpiece Krishna Godavari basin D6 gasfields have seen a sharp drop in production “mainly due toreservoir complexity”.
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KG-D6 fields output dropped 20% to 147.2 billioncubic feet or an average of just over 45 million standardcubic meters per day during the quarter.The drop led to revenue from oil and gas explorationbusiness fall 17.2% to Rs 3,563 crore and pre-taxsegment profit by 10.2% to Rs 1,531 crore.
But this was more than made up by good performance by itstwin adjacent refineries at Jamnagar in Gujarat with acombined capacity of 1.24 million barrels a day.
RIL said it earned $ 10.1 on turning every barrel ofcrude oil into fuel in the quarter as compared to $ 7.9 per barrel gross refining margin (GRM) a year ago. Higher GRMhelped the firm earn 40.3% higher pre-tax profit of Rs3,075 crore.
The company’s refining margins were better than Singaporeaverage of $ 6.18 per barrel.
Higher volumes and prices helped the firm’s petrochemicalbusiness post a 10.2% rise in pretax profit to Rs2,422 crore.
Even though the company had received at least twoinstalments, of the $7.2 billion it is getting from UK’sBP Plc for selling 30% interest in 23 oil and gasblocks including the prime KG-D6, its debt has risen.RIL had an outstanding debt of Rs 71,399 crore on 30September compared to Rs 67,397 crore as on 31 March 2011.
It was expected that the company would use proceeds from BP topre-pay its debt and reduce its interest outgo.It had cash of Rs 61,490 crore ($ 12.6 billion), up fromRs 45,775 crore as on 30 June 2011.
RIL Chairman & Managing Director Mukesh D Ambani said, “The increase in profits was largely driven by improvedperformance in the refining and petrochemicals business. Allour manufacturing facilities operated at record levels withrefineries achieving operating rates of 110%…RIL has strong balance sheet and sustained earning baseto pursue growth opportunities.”
The GRM in Q2 was however lower than $10.3 per barrelmargin RIL earned in April-June quarter of current fiscal.Turnover was up 34.7% to Rs 80,790 crore. Increase in volumes accounted for 3.5% growth inrevenue and higher prices accounted for 32.5% growthin revenue. Exports were higher by 52.2% at Rs 101,872crore as against Rs 66,936 crore in first half (H1) FY10-11.
RIL said interest cost was higher at Rs 1,205 crore infirst half of current fiscal as against Rs 1,083 crore a yearago principally due to higher foreign exchange difference.“This resulted in gross interest cost being higher at Rs1,481 crore as against Rs 1,311 crore,” the statement said.
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