India Reliance posts record $1-billion Q1 profit
Indian retail-to-energy group Reliance Industries Ltd reported a record $1-billion net profit for the financial first-quarter, fuelled by a strong petrochemicals performance.
Reliance, controlled by the country’s wealthiest man Mukesh Ambani, announced net profit for the three months to June climbed by a better-than-expected 13.7 percent to 59.57 billion rupees ($1 billion) in the same period a year ago.
The group, which owns a supermarket chain and a telecommunications company but derives most of its earnings from its massive energy operations, has “delivered a record level of consolidated net profit this quarter,” Ambani said.
The company “has a great pipeline of new projects” that will keep Reliance ahead of rivals, Ambani said in a statement.
The performance beat analysts’ expectations that the company, which runs the world’s biggest refinery complex, would post a net profit of around 54 billion rupees during the first quarter of the 2014-15 financial year.
“The petrochemicals business performance highlights the strength of our portfolio-mix,” Ambani said.
“Alongside, this robust financial performance, we also made significant progress on our growth commitments,” he said.
The company’s strong lineup of new projects “will give Reliance “an enduring competitive advantage”.
He said that the company was further expanding its retail business in existing markets and “exploring newer markets”.
Reliance’s revenues jumped by 7.2 percent to 1.1 trillion rupees ($17.9 billion) in the first quarter from a year earlier.
The company said that gas output from offshore fields in the KG-D6 block on the country’s east coast had fallen by 15 percent during the quarter from a year earlier.
Earlier this month, the government refused to allow Reliance to recover $2.4 billion it had invested to develop the D6 offshore gas block as production had fallen dramatically and was significantly below expected volume.
The company said the fall in output was mainly due to the shutdown of wells in D1 and D3 fields in the D6 block.
The matter is under arbitration amid claims by the oil ministry that output has fallen because the company failed to drill the number of wells it had pledged.
The company says that gas, used widely in energy-hungry India for power, is far harder to extract than initially expected.