SINGAPORE (ICIS)--Reliance Industries Ltd’s (RIL) group net profit rose by 17.9% year on year to Indian rupee (Rp) 94.6bn ($1.38bn) in the quarter ending 30 June amid higher operating margins at its petrochemicals business.
The company’s revenue surged by 56.5% year on year to Rp1,417bn in April-June this year while profit before depreciation, interest, and taxes (PBDIT) was up 52.8% at Rp224.5bn, it said in a statement over the weekend.
RIL’s petrochemicals operating profit almost doubled to Rp78.6bn in the fiscal first quarter ending 30 June from Rp40.3bn in the same period a year earlier.
The company said that its record first-quarter operating profit growth was supported by the “successful stabilisation” at the company’s 1.5m tonnes/year refinery off-gas cracker (ROGC) complex at Jamnagar.
“Sharp increase in segment performance also reflects improvement across polyester chain margins and stable polymer margins,” the company said.
Revenue from the petrochemicals segment rose by 58.2% year on year to Rp402.9bn in the fiscal first quarter amid a 35% rise in sales volumes.
“Our petrochemicals business generated record earnings before interest, tax, depreciation and amortisation (EBITDA) with strong volumes and an upswing in polyester chain margins,” said Mukesh Ambani, the chairman and managing director of RIL.
The operating margin at the petrochemicals business rose to 19.5% in April-June from 15.8% in the same period of 2017.
“Despite the naphtha price increase, Reliance’s polymer chain profitability remained strong as it benefited from switch from naphtha to US ethane imports, even at the Jamnagar complex,” Japan-based Nomura Global Markets Research said in a note on Monday.
“While most new petchem capacity is online, there may be further upside as capacity is de-bottlenecked; utilisations move up further and margins are optimised,” it added.
Petrochemicals production rose to 9.2m tonnes in the three months to 30 June from 6.9m tonnes in the same period of las year.
($1 = Rp68.7)
(Top Image: Mukesh Ambani, the chairman and managing director of RIL; Source: RIL website)
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