India’s Reliance oil-to-chemicals fiscal Q2 EBITDA grows 44% on year

SINGAPORE (ICIS)–Reliance Industries Ltd’s (RIL) oil-to-chemicals (O2C) operations in the September quarter posted a 44% year-on-year growth, backed by a 58% jump in sales, thanks to strong crude prices, the Indian conglomerate said.

In crore or 10m Indian rupees (Rs)	Q2 2021-22	Q2 2020-21	% change	H1 2021-22	H1 2020-21	% change
Revenues	120,475	76,184	58.1	223,687	135,090	65.6
EBITDA	12,720	8,841	43.9	24,951	17,007	46.7
EBITDA Margin (%)	10.6	11.6	–	11.2	12.6	–
Total Throughput, including refinery throughput (in million tonnes)	18.7	16.6	12.7	37.7	34.4	9.6
Producton meant for sale* (in million tonnes)	16.8	14.9	12.8	33.3	30.7	8.5

*Adjusted for captive consumption
+Reliance’s fiscal year is April-March

The decline of segment EBITDA for the quarter “was primarily due to base effect driven by higher feedstock and product prices”, it said in a statement on 22 October.

“Crude prices were lifted higher by tighter supply amid multiple production outages, lowering in uptick of COVID infections and higher overall throughput,” it said.

Demand for polymers in July to September 2021 improved, posting a 7% year-on year growth, following easing of pandemic-related restrictions.

Polymers demand “surpassed pre-COVID levels”, driven by consumption from the e-commerce, health hygiene and packaging sectors, it said.

For polyvinyl chloride, demand was sluggish during the quarter as heavy rainfall across the country hit demand for agricultural pipes, RIL said.

Prices of polyethylene (PE), polypropylene (PP) and PVC in the September quarter rose by 26%, 30% and 54%, respectively, it said.

“PVC prices reached all-time high level at the end of the quarter amidst availability issues from US post-tropical storm [Hurricane] Ida and production restrictions on coal-based capacities in China due to energy shortage,” RIL said.

Cracking operating rates in the fiscal second quarter stood at 96%, compared with 95% in the fiscal first quarter.

Purified terephthalic acid (PTA), paraxylene (PX) and monoethylene glycol (MEG) prices also surged on a year on year basis in the fiscal second quarter along with downstream polyester prices.

In mid-August, RIL was reported to be in advanced stage of negotiations with energy giant Saudi Aramco on an all-stock deal for 20% of the Indian conglomerate’s O2C business.

The O2C business holds all of RIL’s oil refining and petrochemical plants and manufacturing assets in Jamnagar, Dahej, Hazira, Nagothane, Vadodara, Patalganga, Silvassa, Barabanki and Hosiarpur in India.

It also includes RIL’s bulk and wholesale fuel marketing and a 51% stake in a retail fuel joint venture with BP, as well as oil trading subsidiaries in Singapore and the UK and Reliance Industries Uruguay Petroquimica.

O2C also owns the Reliance Ethane Pipeline, which operates a pipeline between Dahej in Gujarat state and Nagothane in Maharashtra state, and the 75:25 joint venture Reliance Sibur Elastomers, which operates a 120,000 tonne/year butyl rubber unit at Jamnagar, Gujarat.

($1 = Rs74.95)