RELIANCE INDUSTRIES LIMITED (CONTD….POST.2) QUARTERLY RESULTS - Q2 FY 2013 - NPT UP 20.2% OVER Q1 FY 13

RELIANCE INDUSTRIES LIMITED

 (CONTD….POST.2)

QUARTERLY RESULTS

Q2 FY 2013

QUARTERLY PERFORMANCE-TABLE

(InRs.Cr)	2QFY13	1QFY13	2QFYQ2	%CHNG	%CHNG
				WRTQ1FY13	WRTQ1FY12
Turnover	93,265	94,926	80,790	-1.70%	15.40%
PBDIT	9,817	8,651	10,946	13.50%	-10.30%
P B T	6,803	5,433	7,317	25.20%	-7.00%
NetProfit	5,376	4,473	5,703	20.20%	-5.70%
EPS.Rs.	16.6	13.7	17.4	21.20%	-4.60%

HIGHLIGHTS OF QUARTER’S PERFORMANCE

2Q FY13 V 1Q FY13

 Revenues (turnover) decreased by 1.7% to Rs.93,265 Cr ($ 17.6 billion)

 Exports increased by 3.9% to  Rs.57,406 Cr ($ 10.9 billion)

 PBDIT increased by 13.5% to  Rs.9,817 Cr ($ 1.9 billion)

 Profit Before Tax increased by 25.2% to Rs.6,803 Cr ($ 1.3 billion)

 Cash Profit increased by 13.8% to  Rs.7,719 Cr ($ 1.5 billion)

 Net Profit increased by 20.2% to Rs.5,376 Cr ($ 1.0 billion)

 Gross Refining Margin at $ 9.5/bbl for the quarter

HALF YEARLY PERFORMANCE - TABLE

(InRs.Cr)	H1 FY 13	H1 FY12	%CHNG
			WRTQ1FY13
Turnover	188,191	164,479	14.40%
PBDIT	18,468	21,950	-15.90%
P B T	12,236	14,581	-16.10%
NetProfit	9,849	11,364	-13.30%
EPS.Rs.	30.3	34.7	-12.70%

HIGHLIGHTS OF HALF YEAR’S PERFORMANCE

 Revenues (turnover) increased by 14% to Rs.188,191 Cr ($ 35.6 billion)

 Exports increased by 11% to  Rs.112,667 Cr ($ 21.3 billion)

 PBDIT at  Rs.18,468 Cr ($ 3.5 billion)

 Profit Before Tax at Rs. 12,236 Cr ($ 2.3 billion)

 Cash Profit at  Rs.14,504 Cr ($ 2.7 billion)

 Net Profit at  Rs.9,849 Cr ($1.8 billion)

 Gross Refining Margin at $ 8.5 /bbl for the half year ended 30th September 2012

FINANCIAL PERFORMANCE

REVIEW AND ANALYSIS

TURNOVER : For the half year ended 30th September 2012, RIL achieved a turnover of Rs.188,191 Cr ($ 35.6 billion), an increase of 14.4% on a year-on-year basis. Higher prices accounted for 15.2% growth in revenue partly offset by decrease in volumes by 0.8%. Exports were higher by 10.6% at Rs.112,667 Cr ($ 21.3 billion) as against  Rs.101,872 Cr in 1H FY12.

CONSUMPTION OF RAW MATERIALS : Higher crude oil prices resulted in consumption of raw materials increasing by 21.7% to Rs.157,131 Cr ($ 29.7 billion) on a year-on-year basis.

EMPLOYEE COSTS were at Rs.1,691 Cr ($ 320 million) for the half year as against Rs.1,593 Cr.

OTHER EXPENDITURE increased by 31.4% from Rs.8,743 Cr to Rs.11,490 Cr ($ 2.2 billion) due to higher power & fuel expenses and higher chemicals and stores consumption.

OPERATING PROFIT  before other income and depreciation decreased by 26.9% from Rs.19,770 Cr to Rs.14,452 Cr ($ 2.7 billion).

NET OPERATING MARGIN was lower at 7.7% as compared to 12.0% in the corresponding period of the previous year due to the base effect.

OTHER INCOME was higher at Rs.4,016 Cr ($ 760 million) as against Rs.2,180 Cr on a year-on-year basis primarily due to higher average liquid investments.

DEPRECIATION (including depletion and amortization) was lower by 23.6% at Rs.4,711 Cr ($ 0.9 billion) against Rs.6,164 Cr in 1H FY12 due to lower production of Oil & Gas.

INTEREST COST was higher at Rs.1,521 Cr ($ 288 million) as against Rs.1,205 Cr in 1H FY12 principally due to higher foreign currency loan denomination and sharp decline in rupee exchange rate. This resulted in gross interest cost being higher at  Rs.1,615 Cr ($ 306 million) as against Rs.1,481 Cr in 1H FY12. Interest capitalized was lower at Rs.95 Cr ($ 18 million) as against Rs.276 Cr.

PROFIT AFTER TAX was Rs.9,849 Cr ($ 1.9 billion) as against Rs.11,364 Cr for the corresponding period of the previous year.

BASIC EPS for the half year ended 30th September 2012 was Rs.30.3 ($ 0.57) against Rs.34.7 for the corresponding period of the previous year.

OUTSTANDING DEBT as on 30th September 2012 was Rs.70,059 Cr ($ 13.3 billion) compared to Rs.68,259 Cr as on 31st March 2012.

CASH+EQUIVALENTS : RIL had cash and cash equivalents of Rs.79,159 Cr ($ 14.9 billion). These were in fixed deposits, certificate of deposits with banks, mutual funds and Government securities / bonds. RIL is debt free on a net basis as at 30th September 2012.

NET CAPITAL EXPENDITURE : Net capital expenditure towards projects for the half year ended 30th September 2012 was Rs.8,528 Cr ($ 1.6 billion). However, cash outflow on account of capex for the first half amounted to Rs. 4,479 Cr ($ 847 million).

RIL retained its domestic credit ratings of AAA from CRISIL and FITCH and an investment grade rating for its international debt from Moody’s and S&P as Baa2 and BBB respectively.

CORPORATE HIGHLIGHTS

 On 25 September 2012, RIL and the Venezuelan state oil company, Petroleos de Venezuela, SA (PDVSA) signed a 15 year heavy crude oil supply contract and an MOU to further develop Venezuelan heavy oil fields. PDVSA will supply between 300,000 and 400,000 barrels per day of Venezuelan heavy crude oil to Reliance’s two refineries in Jamnagar under a 15-year crude oil supply contract. As per the MOU, Reliance will explore upstream options for joint participation in heavy oil projects of the Orinoco Oil Belt.

 RIL selected Fluor Corporation to provide project management services for its projects being executed at its refining and petrochemical complex in Jamnagar, India. These projects represent one of the largest investments globally.

·         RIL selected Phillips 66’s E-Gas™ technology for its coke gasification facility. This facility will process petroleum coke & coal into synthesis gas. Phillips 66 will license the technology to RIL and also provide process engineering design and technical support relating to the gasification technology process area.

·         RIL has selected Technip as a technology supplier and engineering contractor to implement its Refinery Off-Gas Cracker (ROGC) project. This is part of the petrochemical expansion project being executed at Jamnagar, India. The ROGC plant will be amongst the world’s largest ethylene crackers and will be using refinery off-gas as feedstock. This plant will provide feedstock for new downstream petrochemical plants also being built at Jamnagar.

·         RIL signed a $ 2 billion equivalent loan with nine banks covered by Euler Hermes Deutschland AG. (“Euler Hermes”) in May 2012. The loan will be primarily used to finance goods and services procured from German suppliers as part of the petrochemical expansion projects at Jamnagar, Hazira, Silvassa and Dahej in India.

·         Reliance Exploration & Production DMCC, wholly owned subsidiary of RIL has completed the transaction for divestment of its 80% working interest and operatorship in the production sharing contracts (PSCs) for Rovi and Sarta Blocks in the Kurdistan Region to the subsidiaries of Chevron.

·         The Government of India, by its letter of 02 May 2012 has communicated that it proposes to disallow certain costs which the PSC relating to Block KG-DWN-98/3 entitles RIL to recover. RIL maintains that a contractor is entitled to recover all of its costs under the terms of the PSC and there are no provisions that entitle the Government to disallow the recovery of any contract cost as defined in the PSC. RIL has initiated arbitration on this issue.

Commenting on the results, Mukesh D. Ambani, CMD, RIL said: “RIL’s business and financial performance for the first half of FY 2012-13 has been satisfactory despite weakness in global economies and the resultant margin environment. RIL’s facilities continued to deliver operating excellence and this is a true testimony of the quality of our manufacturing assets and human talent. On a sequential quarter basis, net profit for the quarter was up 20% at $ 1 billion. Despite current weakness in global economies, we continue to invest in our long-term growth projects to deliver sustainable value to all our stakeholders”.

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