MUMBAI: Reliance Industries (RIL) reported a 13.5% rise in quarterly net profit, buoyed by strong performance of its consumer-facing businesses and robust refining margins, which made up for a fall in income from its petrochemicals business, a major contributor to the conglomerates income.The company also said it was sticking to its target of being netdebt free by March next year and that talks over Saudi Aramcos proposed acquisition of equity stake in RILs oil-to-chemicals (OTC) business were progressing although the complex transaction was unlikely to be finalised in the current fiscal year.Consolidated net profit for the December quarter rose to a record Rs 11,640 crore while revenue fell1.4% to Rs 1,68,858 crore because of weaker prices of oil and chemicals.
On a standalone basis, net profit rose 7.4% to Rs 9,585 crore while revenue fell 13.1% to Rs 93,741 crore.Telecom venture Reliance Jio Infocomm shone with net profit rising 62.5% to Rs 1,350 crore.
Its subscriber base grew 32% annually to 370 million, with each user spending an average of Rs 128.4 a month during the quarter, the company said in a statement.
Chairman Mukesh Ambani said he was pleased with the performance of consumer businesses although other segments faced challenges.
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, Ambani said in a statement.RILs outstanding debt on December 31, 2019 had risen to Rs 3,06,851 crore ($43.0 billion) compared with Rs 2,87,505 crore at the end of March last year, the company said.
However, cash and cash equivalents rose to Rs 1,53,719 crore from Rs 1,33,027 crore over the same period, implying a fall in net debt.Joint CFO V Srikanth said debt would fall as earnings were rising and capex was declining.
We are earning more than we are investing, so it will lead to reduction in debt.
We have a stated target of being net-debt free by FY21, we are sticking to it, he told reporters after the earnings were announced late on Friday.On the deal with Saudi Aramco, he said: We are making very good progress in engagement across teams.
I cant commit on timelines but it is progressing well It will not be a deal which will get done by March 31; its a large cross-border, complex transaction.
So timelines are something we have to be realistic about.The earnings before interest and taxes(EBIT) of RILs organised retail business rose 58% to Rs 2,389 crore.
The segments gross sales grew 27.4% to Rs 45,327 crore, helped by consumer electronics, fashion - lifestyle and grocery segments which reported a combined growth of 35.7%.RILs refining and petrochemicals businesses saw weaker prices.
Revenue from refining and marketing fell 7.2% to Rs 1,03,718 crore but segment EBIT rose 12% to Rs 5,657 crore because it processed more crude oil, earning $9.2 for each barrel it refined, up from $8.8 a year ago.The petrochemicals business took a hit.
EBIT contracted 28.5% toRs 5,880 crore, while segment revenue fell 19.1% to Rs 36,909 crore.
While demand for products remains good, the company said ethylene prices weakened and reached near 10-year low with ample supply after the startup of new export facility in US and new ethane-based crackers in US.
However, propylene prices firmed up 2% because of tighter regional availability.
Polymer prices also weakened.Srikanth said it would take 12-18 months for petrochemical prices to improve.
In its domestic exploration and production business, revenue fell 10% to Rs 542 crore while EBIT fell to Rs 56 crore from Rs 119 crore.
The segment has been lacklustre in recent years, but new fields being developed in the KG Basin are expected to turn it around when they start pumping gas later in 2020.