Reliance Q1 Net Up 32%, Refining Margins Rise
Indian energy group Reliance Industries posted a 32% rise in fiscal first-quarter profit, slightly better-than-expected, helped by higher gas output from its fields off India's east coast and improved refining margins.
India's largest listed conglomerate, controlled by billionaire Mukesh Ambani and with interests in petrochemicals, refining, oil and gas exploration, and retail, said it saw improved margins across all its businesses in the June quarter.
Reliance, which has been looking to build its business beyond the domestic energy sector, recently made a dramatic return to India's telecoms arena and has announced plans to enter the country's power sector.
"Reliance has also committed itself to participate in the high growth and exciting area of broadband wireless," Ambani said in a statement. "Both these initiatives are in line with the strategy to identify and invest in new, value creating businesses."
In June, the firm said it would invest $1.36 billion in the U.S. shale gas assets of Pioneer Natural Resources, its second such investment in as many months.
Reliance posted April-June net profit of 48.51 rupees ($1.04 billion) versus 36.66 billion rupees ($785 million) a year earlier.
A Reuters poll had forecast quarterly net profit of 48.3 billion rupees.
Gross refining margins at Reliance's flagship refining business showed signs of recovery and stood at $7.3 per barrel for the June quarter, but was still lower than market forecasts for $7.7 a barrel.
The margins stood at $6.8 a barrel in the year-earlier quarter. Reliance GRMs had dropped 24% in the March quarter, and had nearly halved in the December quarter.
Analysts expect margins to rise as the global economy recovers.
Ambani, the world's fourth-richest man, struck a deal in May with his long-estranged younger brother Anil allowing them to compete directly with each other. Mukesh has since pursued markets where Anil is an established presence.
This came after India's Supreme Court in May backed Mukesh in a bitter public dispute over gas pricing that had hit Reliance Industries' share price performance.
Shares in Reliance, valued at around $74 billion, have fallen 3.4% in 2010, while the Mumbai market has gained 3.5%.
Ahead of the earnings announcement, shares in Reliance ended up 0.1% at 1,053.50 rupees in the main market that rose 0.3%.
