Reliance Ind profit declines by 0.97%

Reliance Industries Ltd (RIL) today reported quarterly net profit fell 1 per cent as global crude prices fell hurting product prices and refining margins.

The company posted a net profit excluding exceptional items of Rs 3,874 crore for its fourth quarter ended March, compared with Rs 3912 crore a year ago. The company said it has provided Rs 370 crore as provision towards estimated claims from subsidiaries, without elaborating.

Refining margins fell to $9.9 per barrel in the quarter from $15.5 a year earlier. Analysts expected Reliance's refining margins to fall to $8-$12 a barrel in the March quarter, tracking the decline in Asian benchmark Dubai crack margin.

The company said its petrochemicals EBIT margin for the quarter rose to 17.7 per cent from 10.4 per cent a year before.
Other income rose to Rs 993 crore from 289 crore a year ago. Turnover fell to Rs 29,073 crore from Rs 38,697 crore a year ago.

Ahead of the results, shares in Reliance, closed up 2.7 percent at 1,762.35 rupees in a Mumbai market that rose 2.9 percent.

Reliance agreed to buy crude at high prices last summer on expectations of a continued surge in demand. Since then a sharp fall in prices due to the global economic turmoil meant cargoes were worth much less when they were delivered. The fall in crude prices resulted in lower prices for refined products, leading to inventory losses, the company said.

"This was a transformational year for Reliance," Chairman and Managing Director Mukesh Ambani said in a statement, pointing to the commissioning of the Reliance Petroleum refinery and the completion of gas development projects. The company said oil production from KG-D6 block was expected to resume in the last week of April. The production was shut down for repairs from December.

Analysts said Reliance should show significant growth in coming quarters from sales of gas it started pumping this month from its deep-sea field off the east coast.

By year-end, output from the field in the Bay of Bengal is expected to reach a peak production of 80 mmscmd (million standard cubic metres of gas a day) - a level the upstream regulator has said can be sustained for six years.