RIL profit drops as refining biz falters
NEW DELHI : Reliance Industries Ltd said quarterly profit declined 5.9% from a year earlier, missing analysts’ estimates, due to the weak performance of its chemicals and refining business. Net profit fell to ₹18,258 crore in the three months ended 30 June from ₹19,405 crore in the year-ago quarter. Profit missed the average ₹18,302 crore estimated by a Bloomberg survey of analysts.
Revenue declined by 5.31% to ₹2.1 trillion, in line with estimates. While the company’s oil-to-chemicals (O2C) business reported weak performance, the consumer-centric retail and telecom businesses reported robust earnings. The O2C business’s earnings declined due to a sharp decline in fuel cracks, the difference between the prices of crude oil and refined products, in the June quarter from exceptionally high levels, the company said.
The segment’s revenue fell 17.7% from a year earlier to ₹1.33 trillion. However, it rose 3.4% sequentially. Demand was impacted by destocking on recessionary fears and high interest rates, as well as slower than expected growth in the China market, said the company.
The decline in revenue was also due to a sharp fall in crude oil prices. Brent crude averaged $78.4 a barrel in the June quarter, lower by $35.5 a barrel over the same quarter last year and by $2.9 a barrel over the previous quarter. The total production for sale (adjusted for captive consumption) at 17.2 million tonnes (mt), however, improved over 16.9 mt in the year-ago quarter.
The weaker product cracks are likely to have impacted refining margins, too, analysts said. Polymer prices declined because of subdued demand from China, the US and Europe and destocking due to the volatile energy price environment. The segment’s earnings before interest,
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