RELIANCE INDUSTRIES LTD (RIL) : RESULTS = FOR Q1 FY 2012 (JUNE 2011) = GOOD PERFORMANCE = NPT UP 17% YoY

Reliance Industries Limited

NSE Symbol     RELIANCE

Reliance Industries has declares its Results of performance for the first quarter ending June 2011 (Q1 FY 2012).

HIGH LIGHTS

Highest ever quarterly financial performance

Record refining throughput and strong margin recovery

Rich gas and condensate discovery in deep-water, east coast of India

Highlights of the un-audited financial results as compared to the corresponding period of the previous year are:

4Q FY11	(In ` Crore)	1Q FY12	1Q FY11	% Change wrt 1Q FY11
75,283	Turnover	83,689	61,007	37.2%
10,760	PBDIT	11,005	10,064	9.3%
6,677	P B T	7,264	6,038	20.3%
5,376	Net Profit	5,661	4,851	16.7%
16.4	EPS (`)	17.3	14.8	16.9%

 Highlights :

 Turnover increased by 37.2% to ` 83,689 crore ($ 18.7 billion)

 Exports increased by 57.5% to ` 51,737 crore ($ 11.6 billion)

 PBDIT increased by 9.3% and achieved a record level of ` 11,005 crore ($ 2.5 billion)

 Profit Before Tax increased by 20.3% to ` 7,264 crore ($ 1.6 billion)

 Cash Profit increased by 5.5% to ` 9,006 crore ($ 2.0 billion)

 Net Profit increased by 16.7% to ` 5,661 crore ($ 1.3 billion)

 Gross Refining Margin at $ 10.3 / bbl for the quarter ended 30th June 2011

CORPORATE HIGHLIGHTS

 RIL has been informed that the Cabinet Committee of Economic Affairs has given its approval to the proposal of RIL to assign 30% of its interest to BP Exploration (Alpha) Limited in 21 out of 23 Blocks. RIL will pursue with the Government to resolve the issues, if any, concerning the balance two blocks.

 RIL announced a rich gas and condensate discovery in the very first well drilled in the block CY-PR-DWN-2001/3(CYPR-D6) located in deepwater Cauvery-Palar basin. The block with an area of about 8600 sq km was awarded to RIL under the bidding round of NELP-III. RIL currently holds 100% participating interest in this block. This is one of the 23 exploration blocks where BP would have 30% participating interest.

 AXA, Bharti Enterprises (“Bharti”) and RIL reached an understanding on the acquisition by RIL and its associate Reliance Industrial Infrastructure Limited (“RIIL”) of Bharti‟s shareholding of 74% in Bharti AXA Life Insurance Co. Ltd (“Bharti AXA Life”) and Bharti AXA General Insurance Co. Ltd. (“Bharti AXA GI”).

FINANCIAL PERFORMANCE

REVIEW AND ANALYSIS

Turnover achieved for the quarter ended 30th June 2011 was Rs.83,689 crore ($ 18.7 billion), an increase of 37.2% on a year-on-year basis. Increase in volume accounted for 4.5% growth in revenue and higher prices accounted for 32.7% growth in revenue. Exports were higher by 57.5% at Rs.51,737 crore ($ 11.6 billion) as against Rs.32,849 crore in the corresponding period of the previous year.

Consumption of raw materials increased by 40.6% to Rs.64,443 crore ($ 14.4 billion) mainly on account of higher crude oil prices.

Purchases for traded goods increased from Rs.474 crore to Rs.573 crore.

Employee costs were at Rs.878 crore ($ 196 million) for the quarter as against Rs.617 crore due to higher benefits.

Other expenditure increased by 20.1% from Rs.3,583 crore to Rs.4,301 crore ($ 962 million). This was on account of higher power and fuel expenses, higher stores, chemicals and repair charges, higher selling expenses and lower exchange differences.

Operating profit before other income and depreciation increased by 6.3% from Rs.9,342 crore to Rs.9,927 crore ($ 2.2 billion).

Net operating margin was lower at 11.9% as compared to 15.3% on a year-on-year basis. This was due to base effect and higher weightage of the low-margin refining business.

Other income was higher at Rs.1,078 crore ($ 241 million) as against Rs.722 crore on a year-on-year basis due to income from larger cash balance and higher yields.

Depreciation (including depletion and amortization) was lower by 8.3% at Rs.3,195 crore ($ 715 million) against Rs.3,485 crore on a year-on-year basis. This was mainly due to lower depletion charge in oil & gas and lower depreciation charge for the petrochemicals segment.

Interest cost was at Rs.545 crore ($ 122 million) as against Rs.541 crore. Gross interest cost was higher at Rs.680 crore ($ 152 million) as against Rs.643 crore on a year-on-year basis. Interest capitalized was higher at Rs.135 crore ($ 30 million) as against  Rs.102 crore.

Profit after tax was Rs.5,661 crore ($ 1.3 billion) as against Rs.4,851 crore for the corresponding period of the previous year.

Basic earnings per share (EPS) for the quarter ended 30th June 2011 was Rs.17.3 ($ 0.4) against Rs.14.8 for the corresponding period of the previous year.

Debt as on 30th June 2011 was Rs.67,041 crore ($ 15.0 billion) compared to Rs. 67,397 crore as on 31st March 2011. Net gearing as on 30th June 2011 was 11.4% as against 13.3% as on 31st March 2011.

RIL has cash and cash equivalents of Rs.45,775 crore ($ 10.2 billion) which are invested mainly in bank deposits, mutual funds and Government securities / bonds. RIL‟s net debt is equivalent to 0.5 times its annualized PBDIT for the quarter ended 30th June 2011.

The net capital expenditure for the quarter ended 30th June 2011 was Rs. 1,202 crore ($ 269 million).

RIL retained its credit ratings. Its domestic credit rating is AAA from CRISIL and FITCH while it has investment grade ratings for its international debt from Moody‟s and S&P as Baa2 and BBB respectively.

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