RIL Q1 net drops 11.53% on lower revenues

India`s largest private company Reliance Industries announced on Friday a drop of 11.53% in net profit for the quarter ended June 2009, due to substantial fall in revenues. During the quarter, the profit of the company went down to Rs 36.36 billion from Rs 41.10 billion in the same quarter previous year. The profit was below analysts` expectations. The analysts` surveyed by Bloomberg had estimated earnings of Rs 38.44 billion.

Turnover achieved for the quarter was Rs 333.09 billion reflecting a decrease of 22.6% over the corresponding period of the previous year. Decrease in prices accounted for 24.4% reduction in revenue partially offset by higher volumes which accounted for 1.8% growth in revenue, the company said.

During the period, exports were lower by 38.5% at USD 3.6 billion (Rs 174.33 billion) as against USD 6.6 billion in the corresponding period of the previous year.

Gross refining margin at USD 7.5 / bbl for the quarter ended June 30, 2009. Operating profit before other income and depreciation decreased by 3.2% from Rs 61.21 billion to Rs 59.21 billion (USD 1.2 billion).

Net operating margin for the period was higher at 17.8% as compared to 14.2% in the corresponding period of the previous year due to incremental share of Oil & Gas business, stronger petrochemical margins and base effect of lower turnover partially offset by softer margin environment in refining.

Commenting on the results, Mukesh D. Ambani, chairman and managing director, Reliance Industries said, ``Timely completion with safe and stable start up of the new SEZ refinery and the deep-water, oil and gas KG D6 block are noteworthy accomplishments. These projects will not only play a significant role in shaping the future growth at RIL but more importantly will help change the energy landscape of India and the industry globally.``

The outstanding debt as on June 30, 2009 was Rs 517.80 billion compared to Rs 534.57 billion as on March 31, 2009. Net gearing as on June 30, 2009 was 19.5% as compared to 19.2% on March 31, 2009.

RIL has cash and cash equivalents of Rs 218.27 billion. These are in fixed deposits, certificate of deposits with banks and government securities and bonds. RIL`s net debt was approximately equivalent to 1.1 times annualized PBDIT for the quarter ended June 30, 2009.

The capital expenditure towards projects including interest capitalization for the period ended June 30, 2009 was Rs 40.29 billion.

Shares of the company declined Rs 24.4, or 1.2%, to settle at Rs 2,013.75. The total volume of shares traded was 1,331,381.00 at the BSE (Friday).