Mukesh Ambani-led Reliance Industries Limited (RIL) reported a consolidated net profit of Rs 18,549 crore in the quarter ended December 2021 (Q3), up 42 per cent from corresponding period last year on increased revenues and one-time gain on the back of divestment of shale gas assets in North America.
At the reported level, India’s most valuable company's net profit in the period under review was at a quarterly record high of Rs 20,539 crore, up 37.9 per cent year-on-year.
The company’s consolidated revenue (net of taxes) in Q3 of 2021-22 stood at Rs 185,027 crore, up 57 per cent from the same period last year with highest contribution from oil-to-chemicals business followed by the retail segment. The reported topline of Rs 209,832 crore was the company’s highest ever quarterly revenue, said the management in earnings concall today.
The performance was better that street expectations on all key parameters.
As per Bloomberg estimates, the company’s net sales were seen at Rs 177,700 crore, earnings before interest, taxes, depreciation and amortisation (Ebitda) at Rs 28,380 crore, net profit (before exceptional items) at Rs 15,264 crore.
During the quarter, Reliance Eagleford Upstream Holding, a wholly owned step down subsidiary of RIL, signed agreements with Ensign Operating Ill, LLC, a Delaware limited liability company to divest its interest in certain upstream assets in the Eagleford shale play of Texas, USA, said the company.
With this transaction, RIL has divested all its shale gas assets and has exited from the shale gas business in North America. This transaction resulted in an exceptional gain on sale of assets amounting Rs 2,872 crore (part of Oil & Gas segment). This has lent support to the company's consolidated bottomline. Even after excluding this exception item, the net profit was Rs 17,703 crore, ahead of analysts’ estimates.
The company’s finance cost declined 11.9 per cent on year-on-year (YoY) basis further strengthening the net profit in the December quarter.
Within the business segments, oil-to-chemicals (O2C) revenues jumped 57 per cent YoY to Rs 131,427 crore in Q3, 2021-22 followed by retail revenues at Rs 50,654 crore, up 53 per cent YoY. Digital services revenues from operations saw a relatively smaller jump of 5.8 per cent YoY to Rs 20,597 crore. However, the digital gross revenue (including GST) of Rs 24,176 crore was at a quarterly record high level, said the management.
Revenue of O2C was driven by higher volumes and improved price realisation on the back of 80 per cent YoY increase in crude oil prices.
Exports (including deemed exports) from RIL’s India operations increased by 105.3 per cent to Rs 64,781 crore ($8.7 billion) as against Rs 31,559 crore a year ago mainly due to both higher price realisations and higher volumes, said the company.
“I am happy to announce that Reliance has posted best-ever quarterly performance in 3Q FY22 with strong contribution from all our businesses. Both our consumer businesses, Retail and Digital services have recorded highest ever revenues and EBITDA. During this quarter, we continued to focus on strategic investments and partnerships across our businesses to drive future growth,” Mukesh Ambani, chairman and managing director at Reliance Industries said in a statement.
The company’s consolidated Ebitda was at a quarterly record high level at Rs 33,886 crore in Q3, up 30 per cent YoY driven by robust operating performance across businesses.
RIL's outstanding debt as on December 31, 2021 was Rs 244,708 crore ($32.9 billion) with cash and cash equivalents as on December 31, 2021 at Rs 241,846 crore ($32.5 billion), said the company.
The capital expenditure (including exchange rate difference) for Q3 was Rs 27,582 crore ($3.7 billion) and for nine months ended December 31, 2021 was Rs 69,303 crore ($9.3 billion). Additionally, Rs 43,589 crore ($5.9 billion) were incurred towards acquisition of Spectrum by RJIL, it said.
“We are making steady progress towards achieving our vision of Net Carbon Zero by 2035. Our recent partnerships and investments in technology leaders in the solar and green energy space is illustrative of our commitment to partner India and the World in the transition to clean and green energy,” said Ambani.
Sequentially too, the company’s topline was up 10.4 per cent, while bottomline was up 35.6 per cent and EBITDA up 12 per cent in the December quarter.
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