RIL's Q2 Net dips 6.4 pc on reduced refining margins

New Delhi, Oct 29 (PTI) India's most valued company
Reliance Industries Thursday reported 6.4 per cent drop in net
profit for the second quarter this fiscal as refining margins
tumbled following crude oil's fall from a record.
RIL reported a profit of Rs 3,852 crore for the July-
September quarter, down from Rs 4,116 crore in the same period
a year ago, the company said in a statement here.
The company earned USD 6 on processing of every barrel of
crude oil at its giant refining complex at Jamnagar, less than
half of USD 13.3 per barrel gross refining margin (GRM) in the
second quarter of previous fiscal.
Weak global demand particularly in the US and Europe --
the export markets for RIL's twin refineries -- has led to
squeeze in profit margins for refiners.
"The timely completion of the new SEZ refinery and the
deep-water, oil and gas KG D-6 block and their safe and stable
ramp up are noteworthy accomplishment for the company," RIL
Chairman and Managing Director Mukesh D Ambani said.
Turnover rose 6.1 per cent to Rs 48,843 crore mostly
because of revenue it earned from sale of gas from its eastern
offshore KG D-6 fields and limited exports from its new, only-
for-exports refinery.
On anticipation of second quarter figures, shares of RIL
Thursday closed 1.56 per cent down on BSE at Rs 2,003.85 in
a falling market.
The index heavyweight had gained nearly nine per cent
during the July-September quarter, when the Sensex gained 39
per cent.
"These projects (KG D6 gas fields and only-for-exports
refinery) have contributed meaningfully in RIL achieving a
record level of profits despite the challenging business and
economic environment," Ambani said.
"These projects will make a significant contribution in
shaping the earnings of RIL and also play a vital role in
changing the energy landscape in India."
In a short span of 6 months, total gas production from
KG-D6 has ramped up to over 40 million standard cubic meters
per day. "This is one of the fastest ramp-up in gas production
amongst the deepwater fields worldwide," the statement said.
All the 18 wells of KG-D6 are ready for production but
only 16 wells are currently producing in absence of government
nominated buyers.
The KG D-6 block also produced 222,104 tonnes of crude
oil, the statement said, adding the company earned Rs 2,937
crore from sale of oil and gas during the quarter.
RIL said its twin refineries at Jamnagar operated at
nearly 90 per cent of the capacity. They processed 27.63
million tonnes of crude compared to 16.34 million tonnes a
year ago. The GRM and crude processing this year is for
combined units of old 660,000 barrels per day unit and the new
only-for-exports 580,000 bpd refinery. Last year's numbers
were for only the old unit (J-1) as the new came into
operations only this year.
"Revenue for the refining and marketing segment decreased
by 7.1 per cent from Rs 68,866 crore to Rs 63,998 crore mainly
due to high product prices driven by high crude oil prices
during corresponding period of the previous year," it said.
RIL exported 13.2 million tonnes of products for USD 7.5
billion while last year J-1 had done about 11 million tonnes.
GRM for the first half of current year stood at USD 6.3
per barrel against USD 14.4 a barrel a year ago.
Petrochemical business also saw revenues dipping by 14.2
per cent to Rs 13,340 crore in Q2.
The company's revenue from refining business grew nearly
9 per cent to Rs 39,564 crore.
On the other hand, income from petrochemical business
stood at Rs 13,340 crore, down by 14.20 per cent.
Revenues from the oil and gas segment, which includes
exploration, development and production, more than tripled to
Rs 2,937 crore during the period under review.
Company's expenditure on its employees stood at Rs 596
crore in the reviewed quarter, against Rs 605 crore in the
corresponding period a year ago.
Net profit in the first half of current fiscal fell 8.5
per cent to Rs 7,518 crore while turnover was down 8.7 per
cent at Rs 81,284 crore. PTI ANZ
AM