RIL reports record Q3 net profit of Rs11,640 crore

Oil-to-retail Reliance Industries Ltd (RIL) had reported a net profit of Rs10,251 crore in the corresponding quarter of the previous fiscal.  

RIL's consolidated revenue for the quarter, however, dipped 1.4 per cent to Rs168,858 crore from Rs171,300 crore in the corresponding period last fiscal.

Basic earnings per share (EPS) for the quarter ended 31 December 2019 stood at Rs18.4 up from Rs17.3 in the corresponding period of the previous year.

Gross refinery margin, or margin (GRM) from every barrel of crude oil refined, stood at $9.2 compared to a gross refining margin of $8.8 per barrel in the October-December 2018-19 quarter. GRM was, however, lower than the $9.4 per barrel earned in the July-September 2019-20 quarter.

RIL’s quarterly profits were boosted by record 43.5 per cent rise in its earnings before interest, taxes, depreciation and amortisation (EBITDA) from digital services of Rs5,833 crore and record 62.3 per cent increase in EBITDA from retail business at Rs2,727 crore.

Consumer business segment constituted about 37 per cent of RIL’s EBITDA, which is now set to equal hudrocarbon EBITDA.

Profit before tax increased by 3.6 per cent to Rs14,962 crore while cash profit increased by 10.7 per cent to Rs18,511 crore.

“The third quarter results for our energy business reflects 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,” Mukesh D Ambani, chairman and managing director of Reliance Industries Limited, said. 

“I am pleased with the progress of our consumer businesses which continue to establish new milestones every quarter. We saw consistent same store sales growth and record footfall across our stores driven by our compelling proposition of great shopping experience and superior value, Ambani added. 

On Jio, he said it is focused on giving unmatched digital experience to consumers on a nationwide basis at most affordable price, and accordingly expanding network capacity and coverage to keep pace with demand.

“We are making good progress on the value unlocking initiatives announced earlier while building on sustainable growth platforms for our shareholders,” he added.

During the quarter Reliane signed a definitive agreement with BP relating to the formation of new Indian fuels and mobility joint venture. The venture is expected to be formed during the first half of 2020, subject to regulatory and other customary approvals. The venture expects to expand from RIL’s current fuel retailing network of over 1,400 retail sites and 30 aviation fuel stations across India to up to 5,500 retail sites and 45 aviation fuel stations over the next five years. The retail network will operate under the Jio-BP brand.

RIL also set up a wholly owned subsidiary, Jio Platforms Limited (JPL), for digital initiatives. RIL invested Rs1,65,000 crore in the subsidiary through OCPS and Rs4,961 crore in equity shares. The subsidiary has acquired RIL’s investment of Rs64,450 crore in Reliance Jio Infocomm Limited (RJIL). 

This New-age Digital Technology Platform entity is proposed for holding all digital Platforms, including RJIL, the digital connectivity platform. This will enable access to world class technology platforms across healthcare, education and agriculture.

The board of directors of RJIL approved a scheme of arrangement between RJIL and certain classes of its creditors, including debenture holders, for transfer of identified liabilities of about Rs104,365 crore for an equal consideration to RIL (the Ultimate Holding Company). RJIL has filed the scheme with National Company Law Tribunal (NCLT), seeking approval for transfer of identified liabilities to RIL with an appointed date of 16 December 2019.

During the quarter, Abu Dhabi National Oil Company (ADNOC) signed a framework agreement with RIL to explore development of an ethylene dichloride (EDC) facility in Ruwais. As per the terms of agreement, ADNOC and RIL will evaluate the potential creation of a facility that manufactures EDC adjacent to ADNOC’s integrated refining and petrochemical site in Ruwais, Abu Dhabi and strengthen the companies’ existing relationship supporting future collaboration in petrochemicals.

ADNOC would supply ethylene to the potential joint venture and provide access to world-class infrastructure at Ruwais, while RIL will deliver operational expertise and entry to the large and growing Indian vinyls market, in which it is a key participant.

Reliance Strategic Business Ventures Limited (RSBVL), a wholly-owned subsidiary of RIL, acquired 85 per cent equity stake of NowFloats Technologies Private Limited for Rs141.64 crore. RSBVL proposes to make a further investment of up to Rs75 crore, subject to achieving agreed milestones, by December 2020 which will increase the shareholding to 89.66 per cent.

Indiavidual Learning Private Limited (Embibe), a subsidiary of RIL, acquired 90.5 per cent equity shares of eDreams Edusoft Private Limited (Funtoot) for Rs71.64 crore, and proposes to make the remaining equity shares for up to Rs10 crore subject to Funtoot achieving agreed milestones, by December 2021.

Another wholly owned subsidiary of RIL, RSBVL, acquired 51.78 per cent equity shares of Asteria Aerospace Private Limited for Rs23.12 crore and proposes to invest up to Rs125 crore, subject to Asteria achieving agreed milestones by December 2021.

Reliance Brands Limited, a subsidiary of the RIL, increased its equity shareholding in Future101 Design Private Limited (Future101) by 2.5 per cent for Rs2 crore, taking its equity shareholding in Future101 to 17.5 per cent.

RIIHL, a wholly owned subsidiary of RIL, acquired further shares in SkyTran Inc to increase its shareholding in SkyTran Inc to 17.37 per cent on a fully diluted basis. RIIHL had acquired 12.7 per cent shareholding in SkyTran Inc on 17 October 2018 with an option of investing further amount up to $25 million in convertible notes.

During the quarter RIL also handed back the Panna-Mukta oil and gas fields and the Panna-Mukta and Tapti (PMT) joint venture back to government nominee ONGC.