Reliance Posts Record Profit On Higher Margins
Energy major Reliance Industries posted record profit for the September quarter, beating estimates, bolstered by higher gas output from its field off India's east coast and improved refining margins.
The conglomerate, India's largest listed company, has been investing overseas in shale gas assets and has been looking to widen its businesses beyond petrochemicals, refining, oil and natural gas exploration, and retail.
"Improved refining margins and high operating rates at all our manufacturing facilities led to a record quarter," Chairman Mukesh Ambani said in a statement.
"We are focused on identifying opportunities that leverage Indias unique demographic and market potential," he said.
Controlled by Ambani, the world's fourth-richest man according to Forbes magazine, the company has struck three shale gas joint ventures with U.S. firms so far this year.
The company also made a dramatic return to the telecoms business with a $1 billion acquisition of Infotel Broadband, the only company to win a nationwide license for broadband wireless spectrum in a government auction this year.
Reliance is pumping about 55-60 million cubic meters of gas a day from KG D6, off India's east coast, and the country's oil secretary said in July the company would be able to pump gas at full capacity during the year to March 2013.
Gross refining margin at Reliance's flagship refining business in the September quarter was $7.9 per barrel, up from $7.3 per barrel in April-June and in line market estimates of $8 per barrel.
The margins, a key measure of profitability, stood at $6 a barrel in the year-earlier quarter. The refining margins have been trending higher after having halved in the December 2009 quarter. Reliance said net profit rose 28% to 49.23 billion rupees ($1.1 billion) in the fiscal second-quarter ended Sept. 30 from 38.52 billion a year earlier, for what the company said was its highest ever quarterly profit.
A Reuters poll had forecast quarterly net profit of 48.3 billion rupees.
Shares in Reliance, valued at nearly $81 billion, have risen 0.6% so far in 2010, lagging a nearly 15% gain in the main BSE index.
