India's RIL sees a 17.2% increase in net profit at $ 865 million

RIL has reported a 17.2% increase in net profit at Rs 4,008 crore for the third quarter ended December 31, 2009, when compared with Rs 3,462 crore in the third quarter ended December 31, 2008.

Net sales for the third quarter ended December 31, 2009, were up 80% at Rs 56,856 crore for Rs 29,564 crore in the corresponding quarter of the previous year.

Corporate Highlights
The Scheme of Amalgamation of Reliance Petroleum Limited (RPL) with Reliance Industries Limited (RIL) was sanctioned by the Hon'ble High Court of Judicature at Bombay and the Hon'ble High Court of Gujarat at Ahmedabad. The Scheme became effective from 11th September 2009 with the appointed date being 1st April 2008.

Reliance Industries issued and allotted 162,67,93,078 bonus shares in the ratio of one equity share for every one equity share held in the Company. During the last nine months, the Petroleum Trust sold 1,50,00,000 equity shares of RIL and realized about Rs. 3,188 crore, at an average price of about Rs. 2,125 per share. Subsequent to 31st December 2009, the Petroleum Trust further sold 5,88,49,305 equity shares and realized about Rs. 6,146, crore, at an average price of about Rs. 1,044 per share. Reliance Industrial Investments and Holdings Limited, a wholly owned subsidiary of RIL, is beneficiary of the Trust.

On 2nd April 2009, gas production commenced from KG D6. This ambitious project of RIL was completed in a record time of six and half years, as against world average of 9 - 10 years for similar deepwater facilities globally.

RIL surrendered the EOU status for its refinery with effect from 16th April 2009 to cater to increasing demand of petroleum products in India.

A T Kearney lists RIL as one of the Top 25 Global Champion for 2009 which managed to outperform the competition in the midst of global financial meltdown.

Boston Consulting Group (BCG) ranks RIL as the 5th most sustainable value creator globally.

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said:
"I am delighted that both our key projects namely, the new SEZ refinery and KG D6 oil & gas development have ramped up successfully and safely. This reaffirms our belief in our ability to create truly world class assets in the integrated energy value chain. Reliance is well poised to benefit from the improving global economic environment and domestic markets opportunities."

All comparable YoY Net profit up 15.8% at Rs 4,008 cr vs Rs 3,462 cr

Net sales up 92% at Rs 56,856 cr vs Rs 29,564 cr

EBITDA up 54% at RS 8,284 cr vs Rs 5369 cr

EBIT up 24% at Rs 5,049 cr vs Rs 4,046 cr

Raw material cost up 162% at Rs 42,619 cr vs Rs 16,261 cr

Depreciation cost up 111% at Rs 2795 cr vs Rs 1323 cr

Other income down 23% at Rs 508 cr vs Rs 663 cr

Interest charges up 13.64% at RS 550 cr from Rs 484 cr

Profit before tax up 18.5% at Rs 5007 cr vs RS 4225 cr

Tax expenses up 37% at Rs 999 cr vs Rs 724 cr

Petrochemical revenue up 17% Rs 14756 cr vs Rs 12621 cr

Refining revenue up 143% at Rs 48,000 cr vs Rs 19763 cr

Oil & gas revenue up 242% at Rs 3530 cr vs RS 1031 cr

Key Highlight
Profit, Revenue above BloombergUTV estimate

First profit YoY growth in a year
EPS for 9 mths at Rs 35.3 against Rs 37.6 first nine mth of FY 2009
GRM at $5.9 per barrel, about 90 cents higher than street estimate

GRM declined 1.67% on sequential basis & 41% declined on YoY basis

GRM for 9 mths Dec 09 at $ 6.2/bbl from $12.9/bbl in first 9 mth of FY2009

Increased spread in comparison on benchmark Singapore margin

RPL refinery operated at115%, DTA refinery operated at 100% of capacity
Refineries collectively processed 44.25 Mnt of crude, up 83%

Middle distillate cracks under pressure on low industrial activity & High inventory

Management expected revival in GRM in 2010

Domestic demand for most petrochemical product remained strong

Polymer demand higher by 24%, Polyster by 17% & fibre inter by 8%

Depreciation higher on higher depreciation in oil & gas, refining biz
Refining operating profit nearly double than analyst estimate

Increase in volume accounted for 46% growth in revenue

Revenue partially offset by lower price
KG D6 gas production ramp up to 60MMSCMD