Reliance Q3 net falls 9.8%, beats forecast

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Mumbai: India’s largest listed company, Reliance Industries Ltd, said its quarterly earnings fell 9.8% from a restated year-ago profit, its first drop in three years, but beat forecasts as refining margin eased less than expected.
“This was one of the most challenging quarters for Reliance with volatility in prices and margins,” chairman and managing director Mukesh Ambani said in a statement on Thursday.
“Producers and consumers are coming to terms with slower global trade and economic outlook,” he said.
Reliance, India’s largest petrochemical producer and refiner, is set to get a boost when it starts pumping 30-40 million cubic metres of natural gas a day from its deep-sea fields off country’s east coast in the second half of February.
Another driver would be sales from the newly commissioned 580,000 barrels per day refinery which is run by subsidiary Reliance Petroleum.
Reliance Industries said net profit fell to Rs35.01 billion ($713 million) in its fiscal third quarter ended 31 December from a restated Rs38.82 billion excluding one-off gains a year earlier.
Refining margins, a key measure of profitability, dropped to $10 per barrel from $15.4 a barrel a year ago, against market expectations of $9.16 as sluggish demand in the wake of global economic slowdown pushed oil prices sharply lower.
Reliance’s refining margins are significantly higher than the Asian benchmark in Dubai, as its refinery can process cheaper heavy crude to produce high value products.
Crude oil prices plunged more than $100 from its peak of $147 barrel in July, to $44.60 at the end of December 2008.
Reliance’s retail fuel pumps in the country are shut as it awaits fair competition. Government subsidises state-run oil companies to enable them to sell fuels at heavily discounted, government-set rates but private firms get no such assistance.
Last week, P. Raghavendran, president of the company’s refinery business, said Reliance would reopen its fuel pumps “once we see a reasonable period of stability when we don’t have to shut down again. It depends on when the government comes out with a clear policy and international prices stabilise”.
Ahead of the results, shares in Reliance, which has a market value of around $36 billion, closed up 1.21% at Rs1,132.95 in a Mumbai market that rose 0.4%.
The stock fell 37% in the December quarter, more than a 25% drop in the BSE benchmark Sensex and 33% loss in the sector index.