Reliance Industries Limited (RIL), the Mumbai-based company which operates the world’s largest refining complex, reported a 20% increase in sequential net profit to Rs5,376 crore (US$974 million) in the September quarter, up from Rs4,473 crore (US$810 million) in the June quarter. The company’s higher margins from refining accounts for two-thirds of net sales and has contributed to the sharp increase in profits. A currency depreciation of 5% also improved the bottom line. Net sales showed a slight decrease at Rs90,335 crore (US$16 billion) in the July to September quarter against Rs91,875 crore (US$17 billion) in the June quarter.
Sequential profits were in line with targets, although net profit declined 5.7% year-on-year. However, net sales were 15% higher compared to last year. Gross refining margins for the July-September quarter stood at US$9.50 a barrel compared with US$10.10 a barrel a year earlier.
Petrochemicals, the company’s second biggest line of business, are going through a cyclical low due to a slowdown in China, RIL announced. While margins from this segment of the business are at bottom lows, it is possible they will soon increase. Other income amounting to Rs2,112 crore (US$372 million), mostly from treasury gains, accounted for 31% of the company’s pre-tax profit for the quarter. (October 15, 2012)