Good petrochemical and telecom businesses offset lower other income and weak refining business.
Telecom-oil-to-retail conglomerate Reliance Industries has reported a 0.6 percent sequential growth in consolidated profit to Rs 9,516 crore for the quarter ended September 2018. Good petrochemical and telecom businesses offset lower other income and weak refining business.
Consolidated revenue during the quarter grew by 11.3 percent to Rs 1.43 lakh crore driven by growth across segments.
Profit on year increased 17.35 percent and revenue jumped 56.66 percent in second quarter.
"Company delivered robust operating and financial results for the quarter despite macro headwinds, with strong growth in earnings on YoY basis," Mukesh Dhirubhai Ambani, Chairman and Managing Director said.
World-class petrochemicals assets contributed record earnings; endorsing benefits of diversified feedstock, integration and superior product portfolio, he added.
Petrochemical business grew by 8.6 percent sequentially to Rs 43,745 crore with its EBIT (earnings before interest and tax) rising 3.3 percent to Rs 8,120 crore.
Refining segment revenue during the quarter increased 3.25 percent QoQ (up 41.6 percent YoY) to Rs 98,760 crore with its EBIT growing only 0.13 percent QoQ (down 19.6 percent YoY) to Rs 5,322 crore.
Refining and marketing performance was impacted by significantly higher crude price (up 47 percent YoY), tighter light-heavy differential and adverse movement in light distillate cracks on Y-o-Y basis and shutdown of Fluid Catalytic Cracking Unit (FCC), the company said.
Mukesh Ambani Group company said gross refining margin for the quarter stood at $9.50 a barrel, outperforming Singapore complex margins by $3.4 a barrel. GRM for June quarter was $10.5 a barrel.
On the operational front, EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 2.2 percent quarter-on-quarter to Rs 21,108 crore. Margin for the quarter stood at 14.7 percent against 16 percent in June quarter.
Other income during the quarter declined nearly 30 percent sequentially to Rs 1,250 crore.
Mukesh Ambani said the financial performance of both Retail and Jio reflect the benefits of scale, technology and operational efficiencies. "Retail business EBITDA has grown three fold on Y-o-Y basis whereas Reliance Jio EBITDA has grown nearly 2.5 times."
Jio has now crossed 250 million subscriber milestone and continues to be the largest mobile data carrier in the world, he added.
Reliance Jio
Reliance Jio's second quarter profit increased to Rs 681 crore in Q2FY19, a growth of 11.3 percent over Rs 612 crore reported in June quarter, driven by consistent addition in subscriber base.
Revenue during the quarter grew by 13.9 percent sequentially to Rs 9,240 crore, the company said.
Average revenue per user for the quarter stood at Rs 131.70 against Rs 134.5 in previous quarter.
Jio's EBITDA in second quarter increased 13.5 percent to Rs 3,573 crore QoQ.
Strategic Investments
Reliance Industries announced strategic investments in and partnership with cable television service operators Den Networks and Hathway Cable and Datacom.
Hathway Cable has announced issuance of preferential shares to Reliance Jio at a premium of 10 percent to Wednesday's closing price, approving raising upto Rs 2,940 crore via preferential allotment to Jio.
Hence the company will issue 90.8 crore shares to Reliance Jio at Rs 32.35 per share, which will be resulted into acquisition of 51.34 percent stake in the company by Jio.
Reliance Jio will acquire 66.01 percent stake in Den Networks through primary investment of Rs 2,045 crore via a preferential issue and secondary purchase of Rs 245 crore from the existing promoters.
DEN will issue 28.1 crore equity shares to Jio at Rs 72.66 per share.
Retail Segment
Retail business registered a healthy 25.3 percent sequential growth at Rs 32,436 crore with its EBIT rising 16.4 percent to Rs 1,244 crore for the quarter ended September 2018.
Reliance said the outstanding debt as of September 2018 was Rs 2,58,701 crore compared to Rs 218,763 crore as of March 2018. Cash and cash equivalents as of September 2018 were at Rs 76,740 crore against Rs 78,063 crore as of March 2018, it added.
The stock rallied 29 percent during the quarter and gained 26 percent year-to-date. It has, though, corrected nearly 12 percent since August 28, when the market touched record high.
The stock closed at Rs 1,148.90, down Rs 14.75, or 1.27 percent ahead of quarterly earnings announced after market hours.
Disclaimer: Reliance Industries Ltd, which owns Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
