Reliance Q4 net up 9.16% at Rs 2,502 cr

Dividend of Rs 10 a share for the financial year 2005-06.

Reliance Industries Ltd (RIL) today announced 9.16 per cent growth in quarterly net profit, beating analysts' forecasts, on record refining margins.

The country's largest private sector refiner posted net profit of Rs 2,502 crore in the fourth quarter of the last year, compared with Rs 2,292 crore in the corresponding period of the previous year. Net turnover during the period went up by 37.57 per cent from Rs 17,839 crore to Rs 24,542 crore.

For 2005-06, the company's net profit has grown by 19.77 per cent to Rs 9,069 crore from Rs 7,572 in the previous year. The net turnover surged to Rs 81,211 crore, against Rs 66,051 crore, an increase of 22.95 per cent. The increase in net profit was on account of a 1 per cent increase in sales volume and 22 per cent increase in selling prices.

During the year, cash profit grew 9 per cent to Rs 13,174 crore from Rs 12,087 crore. Operating profit was Rs14,982 crore, a 5 per cent rise over the previous year's Rs 14,261 crore. Despite higher selling prices, the company's operating profit was impacted due to higher raw material cost and a planned shutdown of the refinery.

Exports rose 28 per cent to Rs 32,691 crore against Rs 25,532 crore last year.

Consumption of raw materials increased by 27 per cent from Rs 45,932 crore to Rs 58,343 crore.

Reliance, also a top maker of polyester fibre, yarn and paraxylene, runs a 6,60,000-barrel-per-day refinery that processes relatively cheap, heavy sour crude to make high-quality products.

The company has achieved 13 per cent retail market share within a year in the retailing of transportation fuels. Reliance has added 867 retail outlets last year. Of 5849 outlets for which it received approvals for, it has so far set up 1218 outlets. Last year, the company spent Rs 850 crore on capex of retail business.

In a media release, Reliance said its refinery margins last year were its highest ever at $10.3 a barrel, compared to $9.1 a barrel in October-December, and higher than benchmark Singapore refining margins.

Buoyed by the good show, the buying pressure at the Reliance counter witnessed the stock scaling up new high of Rs 1,013 in a highly volatile Mumbai market. The stock fibally closed at Rs 996.50 on the Bombay Stock Exchange, 1.91 per cent higher than yesterday's close of Rs 977.85.

It has proposed dividend of Rs 10 a share for the financial year 2005-06, up from Rs 7.50 in the previous year. At this rate, total dividend payout will be Rs 1,394 crore.

The company had shut its refinery at Jamnagar in Gujarat for more than 50 days which caused a 6 percent drop in net profit in October-December period. Fuel refining delivers about 56 per cent of Reliance's revenue.

Commenting on the results, Reliance Industries Chairman and Managing Director Mukesh Ambani said, "It has been a good year in an extremely challenging environment. What is more gratifying is the growth in our profits from a little over $ 1 billion to over $ 2 billion in a span of just months. We are now investng in each of our businesses to achieve substantial earnings growth in the future and create further value for millions of our shareholders."

Last year, the company spent Rs 9, 476 crore on capital expenditure which was 71 per cent of cash profit.

The production of oil, gas and petrochemicals by RIL is 13.5 million tonne in 2005-06 against 12.7 million tonne in the previous year, a 6 per cent rise. Apart from the 33 million tonne per annum refinery at Jamnagar, RIL is building a 27 MTPA refinery near the existing facility.