RIL 2008 petchem EBIT up 8%, production up 5%

21 April 2008 16:04  [Source: ICIS news]

MUMBAI (ICIS news)--India’s Reliance Industries Limited (RIL) posted a 8% year-on-year rise in its petrochemical segment’s earnings before interest and tax (EBIT) for the FY08 period ended 31 March to Indian rupees (Rs) 71.1bn ($1.8bn) due to strong downstream demand, higher production and firm prices, it said on Monday.

For the full year period, revenue for the petchem segment increased 5% to Rs530bn, in spite of the impact from high feedstock prices.

“Increased prices accounted for 2% of the sales [in the petchem segment] growth while higher volumes accounted for 3% increase in sales,” the company said.

For the full year, production of petrochemical products increased 5% to 19.6m tonnes, the company said.

All the polymer products witnessed strong domestic demand on the back of high economic growth.

The overall polymers segment, which includes polypropylene (PP), polyethylene (PE) and polyvinyl chloride (PVC) grew 5% to 3.37m tonnes for the full year period.

Demand for PP grew 16%, PE by 17% and the demand for PVC rose 12%, RIL said.

The domestic polymers market witnessed 15% demand growth compared with the previous year. RIL is India’s largest producer of polymers with a 55% share of the domestic market, it said.

The increase in demand for polymers came from segments such as flexible packaging, infrastructure, cables, consumer durables and agriculture, the company said.

RIL produced 1.89m tonnes of ethylene and 748,000 tonnes of propylene, up 7% over the previous year.

Polyester production volumes, which include polyester filament yarn (PFY), polyester staple fibre (PSF) and polyethylene terephthalate (PET), were up 6% to 1.57m tonnes for the full-year period.

RIL’s polyester intermediates production, which includes paraxylene (PX), purified terephthalic acid (PTA) and monoethylene glycol (MEG) grew 9% to 4.71m tonnes.

Polyester witnessed exciting demand growth in the domestic market at 17% over the previous year, with Reliance realising the benefits of its 76% domestic market share in polyester intermediates, it said.

However, PX margins narrowed due to lower prices and higher feedstock naphtha costs, the company said.

The increased demand for polyester was driven by robust investments in textile sector and PET consumer industries during the previous year.

For the full year period, the company’s demand for PET grew 26% and for partially oriented yarn (POY) grew 18% whereas polyester staple fibre (PSF) demand was up 12%, compared with the previous year, RIL added.

For the full year period, RIL posted a an 18% year-on-year rise in group earnings before interest tax depreciation and amortisation (EBITDA) to Rs 242.01bn.

($1 = Rs39.73)

By: Isha Jha
+65 6780 4359

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