Better prices in refining and petrochem boost RIL Q2 net profit

Oil-to-telecoms conglomerate Reliance Industries Ltd posted a 12.5 per cent rise in its September-quarter consolidated net profit, buoyed by higher margins from its core refining and petrochemicals businesses.

"The strong financial results of Jio demonstrates the robust business model of Jio and the significant efficiencies that the Company has built through its investment in the latest 4G technology and right business strategy".

Consolidated profit was estimated at Rs 8,169 crore and EBITDA at Rs 13,178 crore with margin of 15.4 percent for the quarter, according to average of estimates of analysts polled by CNBC-TV18. Profit on a standalone basis, which includes the company~s refining, petrochemicals and oil and gas exploration businesses, increased by 7% at Rs 8,265 crore against last year's figure recorded at Rs 7,704 crore.

"The results reflect strong underlying fundamentals of our refining and petrochemicals businesses".

Gross refining margin for the quarter came in at Dollars 12 per barrel, which was slightly below analysts' estimates but still at 9-year high.

Last quarter, digital services - which is what Jio is termed as on the company's books - were shown as generating a revenue of just 145 cr rupees, and an operating loss of Rs 22 cr.

Interestingly, data provided by RIL, it was known that Reliance Jio's net loss widened in Q2 at Rs 270.59 crore compared to net loss of Rs 21.27 crore in Q1FY18 and net loss of Rs 3.90 crore in Q2FY17. Sustained demand growth coupled with supply disruptions further tightened demand-supply balances globally during the quarter.

"Positive EBIT in the first quarter of commercial operations, given tremendous uptake by subscribers and cost advantages generated through use of efficient 4G technology", the company said.

Total income of Reliance Jio from operations came in at Rs 6,148.7 crore in the September quarter against Rs 0.30 crore notched during the first quarter of the current fiscal.

In this quarter, revenue from the Refining and Marketing segment increased by 15.3% Y-o-Y to Rs 69,766 crore ($ 10.7 billion). Since commencement of services on September 5, 2016, Jio has been aggressive with its pricing tariffs, to cross 100 million subscribers in 170 days, adding 6 lakh subscribers per day at an average.

The company reported EBITDA (earnings before interest, taxes, depreciation and amortisation) of Rs 1,443 crore in July-September 2017 period with margin pegged at 23.5 per cent.

"He added, ". We are confident that Jio will bring significant benefits to the Indian economy and the Indian customers and will take India to a much higher pedestal". "GRM in the quarter at $12 per barrel is at a 9-year high", said RIL Chief Financial Officer Alok Agarwal. Segment Ebit (earnings before interest and tax) also rose sharply by 45.2 percent to Rs 4,960 crore, "supported by strong volume growth, higher margins and improved product mix with ethane cracking stabilising at Dahej and Hazira", the company statement said.

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