RIL net profit up by 18.3% at INR 11,262 crore

RIL Q2 report

RIL recorded quarterly PBDIT of ` 25,820 CRORE ($ 3.6 BILLION), up 15.5 %.

Reliance Industries Limited (RIL) reported its financial performance for the quarter / half year ended 30th September, 2019. Highlights of the unaudited financial results as compared to the previous periods are:

HIGHLIGHTS OF QUARTER’S PERFORMANCE (CONSOLIDATED – RIL)

• Revenue increased by 4.8% to ` 163,854 crore ($ 23.1 billion)
• PBDIT increased by 15.5% to ` 25,820 crore ($ 3.6 billion)
• Profit Before Tax increased by 14.1% to ` 15,055 crore ($ 2.1 billion)
• Cash Profit increased by 18.0% to ` 18,305 crore ($ 2.6 billion)
• Net Profit increased by 18.3% to ` 11,262 crore ($ 1.6 billion)

HIGHLIGHTS OF QUARTER’S PERFORMANCE (STANDALONE – RIL)

• Revenue decreased by 8.4% to ` 94,446 crore ($ 13.3 billion)
• Exports decreased by 12.1% to ` 53,161 crore ($ 7.5 billion)
• PBDIT increased by 2.3% to ` 17,295 crore ($ 2.4 billion)
• Profit Before Tax increased by 4.4% to ` 12,255 crore ($ 1.7 billion)
• Cash Profit increased by 7.5% to ` 13,020 crore ($ 1.8 billion)
• Net Profit increased by 9.5% to ` 9,702 crore ($ 1.4 billion)
• Gross Refining Margin (GRM) of $ 9.4/bbl for the quarter
• Refining Throughput of 16.7 MMT during the quarter
• Petchemicals Production of 9.9 MMT during the quarter

HIGHLIGHTS OF QUARTER’S PERFORMANCE (CONSOLIDATED – RJIL)

• Revenue increased by 33.1% to ` 14,562 crore ($ 2.1 billion)
• PBDIT increased by 44.4% to ` 5,188 crore ($ 0.7 billion)
• Profit Before Tax increased by 45.2% to ` 1,525 crore ($ 0.2 billion)
• Cash Profit increased by 31.1% to ` 3,109 crore ($ 0.4 billion)
• Net Profit increased by 45.4% to ` 996 crore ($ 0.1 billion)
• Subscribers 355.2 million, up 40.8%
• ARPU during the quarter of ` 120 per subscriber per month
• Data traffic of 1,202 crore GB, up 55.9% and voice traffic of 81,262 crore minutes, up 52.2%

HIGHLIGHTS OF QUARTER’S PERFORMANCE (CONSOLIDATED – RRVL)

• Revenue increased by 27.0% to ` 41,202 crore ($ 5.8 billion)
• PBDIT increased by 66.8% to ` 2,322 crore ($ 0.3 billion)
• Profit Before Tax increased by 53.4% to ` 1,750 crore ($ 0.2 billion)
• Cash Profit increased by 69.4% to ` 2,431 crore ($ 0.3 billion)
• Net Profit increased by 55.8% to ` 1,148 crore ($ 0.2 billion)
• 10,901 stores with an area of 24.5 million square feet, up 25%
• 337 new stores opened during the quarter
• 154 million footfalls during the quarter, up 11.6%

CORPORATE HIGHLIGHTS FOR THE QUARTER (2Q FY20)

• Saudi Aramco and RIL signed a non-binding Letter of Intent (“LOI”) regarding a proposed investment in the Oil to Chemicals (O2C) division comprising the Refining, Petrochemicals and fuels marketing businesses of RIL. Saudi Aramco’s potential 20% stake is based upon an Enterprise Value of US$ 75 billion for the O2C division. This would be one of the largest foreign investments ever made in India.

• BP and RIL agreed to form a new joint venture that will include a retail service station network and aviation fuels business across India. Building on Reliance’s existing Indian fuel retailing network and an aviation fuel business, the partners expect the venture to expand rapidly to help meet the country’s fast-growing demand for energy and mobility. Reliance will get approximately

• ` 7,000 crore from BP’s investment in this joint venture.

• Jio, the world’s largest mobile data network, announced the commencement of JioFiber, its Fiber to the Home service, across 1,600 cities in India. With JioFiber, Jio continues to deliver on its promise of connecting the unconnected while bringing about transformational changes to Indian homes.

• Reliance Industrial Investments and Holdings Limited (“RIIHL”), a wholly-owned subsidiary of RIL, entered into an agreement with BIF IV Jarvis India Pte Limited, an affiliate of Brookfield Asset Management Inc. (“Brookfield”) for an investment by Brookfield (along with coinvestors) of ` 25,215 crore in the units proposed to be issued by the Tower Infrastructure Trust (“Trust”) in accordance with the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014. Brookfield’s investment is subject to conditions precedent, including receipt of requisite government and regulatory approvals.

• RIIHL, a wholly-owned subsidiary of RIL entered into an agreement for acquisition of equity shares of Shopsense Retail Technologies Pvt. Ltd. (“Shopsense” or “Fynd”) for a cash consideration not exceeding ` 295 crore. RIIHL has an option to further invest an amount of up to ` 100 crore which is likely to be completed by December 2021. The total investment will translate into ~87.6% of equity share capital in Fynd on a fully diluted and converted basis.

• Reliance Jio Infocomm Limited (Jio), a subsidiary of RIL, and Microsoft Corp. announced formation of a new alliance. The alliance will embark on a unique, comprehensive, long-term strategic relationship aimed at accelerating the digital transformation of the Indian economy and society. This 10-year commitment combines the world-class capabilities of both companies to offer a detailed set of solutions comprising connectivity, computing, storage solutions, and other technology services and applications essential for Indian businesses and will span the broad Reliance Industries ecosystem including its existing and new businesses.

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said “The Company has reported record net profit for the quarter. These excellent results reflect benefits of our integrated Oil to Chemicals (O2C) value chain and the rapid scale-up of our Consumer businesses. During this quarter, our O2C businesses gained from favourable fuel margins environment, feedstock sourcing flexibility and higher petrochemicals volumes. Our O2C business, with new partnerships, is best placed to pursue growth and substantial value creation.

Continuing growth trends in our retail business is heartening. Guided by our obsession to provide the best value for our customers, Reliance Retail delivered robust performance with record quarterly revenues and EBITDA. Our digital services business is recognized for having the nation’s widest 4G wireless network. As an outcome of our team’s relentless efforts, Jio has become India’s largest mobility services provider. Jio today also has the highest market share in terms of 4G subscriber base and 4G data traffic in India. We are now executing yet another game changing initiative with the largest ever roll out of broadband services to home and enterprises through JioFiber. As always, we are committed to bring to Indian consumers more world-class products and services and providing them unique value propositions through innovation and technology.”

2Q FY 2019-20: FINANCIAL PERFORMANCE REVIEW AND ANALYSIS (CONSOLIDATED)

For the quarter ended 30th September 2019, RIL achieved revenue of ` 163,854 crore ($23.1 billion), an increase of 4.8% as compared to ` 156,291 crore in the corresponding period of the previous year. Increase in revenue is primarily on account of robust growth in Retail & Digital Services businesses which grew by 27% and 43%, respectively. This was partially offset by decrease in Refining and Petrochemicals segment revenue with 17.7% fall in Brent crude price.

Exports (including deemed exports) from RIL’s India operations were lower by 12.1% at ` 53,161 crore ($ 7.5 billion) as against ` 60,460 crore in the corresponding period of the previous year primarily due to lower price realization for refining and petrochemical products and emphasis in domestic placement.

Other expenditure increased by 22.2% to ` 22,993 crore ($ 3.2 billion) as against ` 18,809 crore in corresponding period of the previous year primarily due to higher network operating expenses and regulatory charges.

Segment EBITDA increased by 7.1% to ` 23,169 crore ($ 3.3 billion) from ` 21,641 crore in the corresponding period of the previous year. Robust growth in contribution from Retail up 67% Y-o-Y and Digital services up 48% Y-o-Y led to increase in segment EBITDA.

Depreciation (including depletion and amortization) was at ` 5,315 crore ($ 750 million) as compared to ` 5,229 crore in corresponding period of the previous year.

Finance cost was at ` 5,450 crore ($ 769 million) as against ` 3,932 crore in corresponding period of the previous year. This increase is primarily on account of currency depreciation and higher loan balances.

Profit after tax was higher by 18.3% at ` 11,262 crore ($ 1.6 billion) as against ` 9,516 crore in the corresponding period of the previous year.

Basic earnings per share (EPS) for the quarter ended 30th September 2019 was ` 18.6 as against ` 16.1 in the corresponding period of the previous year.

Outstanding debt as on 30th September 2019 was ` 291,982 crore ($ 41.2 billion) compared to ` 287,505 crore as on 31st March, 2019.

Cash and cash equivalents as on 30th September, 2019 were at ` 134,746 crore ($ 19.0 billion) compared to ` 133,027 crore as on 31st March, 2019.

The capital expenditure for the quarter ended 30th September, 2019 was ` 19,095 crore ($ 2.7 billion) including exchange rate difference.

RIL retained its domestic credit ratings of “CRISIL AAA/Stable” from CRISIL and “IND AAA/Stable” from India Ratings and an investment grade rating for its international debt from Moody’s as “Baa2” and “BBB+” from S&P.