Reliance Q2 net up 28pc
Bombay, October 19, 2007
India's biggest listed company, Reliance Industries, posted a better-than-expected 28 per cent rise in second-quarter net profit on strong oil refining margins.
India's most valuable company, worth about $94 billion, said its July-September net profit rose to 38.37 billion rupees ($964 million) from 30 billion rupees a year ago, which was restated to account for the amalgamation of its unit IPCL.
Net turnover grew 6.6 per cent to 320.43 billion rupees from 300.56 billion.
Fourteen analysts polled by Reuters had forecast net profit of 33.79 billion rupees and net sales of 313.2 billion.
Reliance said in a statement its refining margin during the quarter was $13.6 per barrel, down from $15.4 in April-June but much higher than the year-ago $9.1.
'Globally the refining sector had a tough time this quarter ... margins on gasoline sales were crushed all over the world,' said Alok Agarwal, chief financial officer at Reliance.
Reliance's margins were significantly better than those in other parts of the world and it attributed this to flexibility to produce middle distillates -- products like gas oil and jet kerosene -- which had relatively firm margins.
'We have a refinery configuration which has a very small percentage of gasoline production and most of our production has been diesel, kerosene and jet fuel. Those were less impacted,' Agarwal said.
Reliance said its Jamnagar refinery, the world's third largest, had the ability to process cheaper crude oil, which is heavier and has a high sulphur content. It said the refinery processed four new types of crude in the current fiscal year.
Reliance, which is also the world's top make of polyester fibre and yarn, absorbed its Indian Petrochemicals Corp unit in September.
On its plans to introduce a network of stores selling groceries, fruit and vegetables across the country, Reliance said it had now had 339 stores. But openings were going slowly in a few cities and towns where it has been facing opposition.
'We have set a target for ourselves of 18-24 months for Reliance Retail to contribute to our revenues,' Agarwal said. Reuters