RELIANCE INDUSTRIES LTD
RESULTS FOR Q3 FY
2012-13
Q/E DEC, 2012
RECORD 9
MONTH REVENUE OF
Rs.284,500 CR &
EXPORTS OF Rs.179,581 CR
HIGHEST EVER REFINING QUARTERLY EBIT OF Rs.3,615
CR
3Q FY13 GROSS
REFINING
MARGIN
OF $ 9.6 / BARREL
3Q FY13 NET
PROFIT
OF Rs.5,502 CR,
GROWTH OF 24%
ON A Y-O-Y BASIS
Reliance Industries Limited (RIL) has reported its
financial performance for the quarter / nine months ended 31st December, 2012.
Highlights
RIL -Crs
|
Q3FY13
|
Q2 FY13
|
Q3 FY12
|
%DIF WR Q2 FY13
|
%Dif wr Q3 FY12
|
9MFY13
|
9M FY 12
|
%Dif wr 9M FY12
|
Turnover
|
96,307
|
93,266
|
87,480
|
3.30%
|
10.10%
|
284,500
|
251,958
|
12.90%
|
PBDIT
|
10,113
|
9,889
|
9,002
|
2.30%
|
12.30%
|
28,717
|
30,952
|
-7.20%
|
P B T
|
6,850
|
6,846
|
5,738
|
0.10%
|
19.40%
|
19,164
|
20,319
|
-5.70%
|
Net Profit
|
5,502
|
5,409
|
4,440
|
1.70%
|
23.90%
|
15,414
|
15,804
|
-2.50%
|
EPS (Rs)
|
17
|
16.7
|
13.6
|
1.80%
|
25.00%
|
47.5
|
48.3
|
-1.70%
|
HIGHLIGHTS
OF
NINE MONTH’S PERFORMANCE
• Revenue (turnover) increased by 12.9% to Rs.284,500
cr
• Exports increased by 14.6% to Rs.179,581 cr
• PBDIT at Rs.28,717 cr
• Profit Before Tax at Rs.19,164 cr
• Cash Profit at Rs. 22,561 cr
• Net Profit at Rs.15,414 cr
• Gross Refining Margin at $9.0/bbl for the 9 month
ended 31st Dec, 2012
HIGHLIGHTS OF
QUARTER’S PERFORMANCE
3Q FY13 V
2Q FY13
• Revenue (turnover) increased by 3.3% to Rs.96,307
cr
• Exports increased by 16.6% to Rs.66,915 cr
• PBDIT increased by 2.3% to Rs.10,113 cr
• Profit Before Tax increased by 0.1% to Rs.6,850
cr
• Cash Profit increased by 2.0% to Rs.7,938 cr
• Net Profit increased by 1.7% to Rs.5,502 cr
• Gross Refining Margin at $9.6/bbl
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 Phillips66’s E-Gas™ technology for its coke gasification facility.
This facility will process petroleum coke & coal into synthesis gas.
Phillips66 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 has selected Foster Wheeler as an engineering and procurement services
contractor for its Paraxylene project. This is part of the expansion project
being executed at RIL’s world-scale Jamnagar refining and petrochemical complex
in Gujarat, on the West Coast of 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.
•
Reliance Exploration and Production DMCC, a wholly owned subsidiary of RIL, has
signed the completion documents for divestment of its 25% Working Interest in the
Production Sharing Contract (PSC) for Yemen Block-9 with Medco Yemen Malik
Ltd., a wholly owned subsidiary of PT Medco Energi International Tbk of
Indonesia. The effective economic date of the transaction is 1st January, 2012
and the transaction has been approved by the Ministry of Oil and Minerals of
Yemen.
•
The Govt of India, on 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.
•
The Board of Ex-Im Bank of the United States has voted to extend the single
largest financing transaction of $ 2.1 billion to RIL. This includes a $ 1.06
billion direct loan and to guarantee a $ 1.06 billion JPMorgan Chase loan to
the Company. The loan will be primarily used to finance goods and services
procured from exporters and suppliers in the United States as part of
Reliance's expansion projects at Jamnagar, Gujarat.
•
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.
•
The Scheme of Amalgamation of Reliance Jamnagar Infrastructure Limited (RJIL)
with RIL has been sanctioned by the Honorable High Court of Gujarat at Ah’bad,
the appointed date of the Scheme being 1stApril 2011.
The
Global Reporting Initiative (GRI) has awarded A+ level to RIL’s Sustainability
Report 2011-12. This is the 7th consecutive year that RIL has received the
highest application level on sustainability reporting. RIL is also the first
Indian company to adhere to the GRI 3.1 Oil & Gas Sector Supplement,
released in February 2012.
Commenting
on the results, Mukesh D. Ambani, CMD, RIL said:“RIL’s
performance has improved in this quarter with margin expansion in petrochemicals
and record earnings in the refining business. We are investing over Rs.100,000 Cr
by expanding our petrochemical capacities and adding value to our refining
business. These investments will secure a significant change in RIL’s earning
capacity on commissioning of these projects. It will also provide employment
opportunity for thousands of young Indians and support India’s economic growth”.
FINANCIAL PERFORMANCE REVIEW AND ANALYSIS
TURNOVER
: For 9 m/e 31st Dec, 2012, RIL achieved a turnover of Rs.284,500 Cr , an increase
of 12.9% on a Y-o-Y basis. Higher prices accounted for 13.7% growth in revenue
which was partly offset by the decrease in production volumes by 0.8%. Exports were
higher by 14.6% at Rs.179,581 Cr as against Rs.156,753 Cr in 9M FY12.
Higher
crude oil prices resulted in consumption of raw materials increasing by 15.7%
to Rs.235,145 Cr on a Y-o-Y basis.
Employee Costs
were at Rs.2,562 Cr for the 9 m/e 31st Dec,2012 as against Rs.2,265 Cr.
Other
expenditure increased by 31.1% from Rs.13,106 Cr to Rs.17,178
Cr due to higher power & fuel expenses (imported LNG), higher selling
expenses (higher exports) and higher chemicals and stores consumption.
Operating
profit before other income and depreciation
decreased by15.1% from Rs. 27,055 Cr to Rs.22,962Cr due to reduction in oil
& gas and petrochemicals profits, partially offset by higher operating
profit from refining. Net operating margin was lower at 8.1% as
compared to 10.7% on a Y-o-Y basis due to the base effect.
Other income
was higher at Rs. 5,755 Cr as against Rs.3,897 Cr primarily due to higher
liquid investments.
Depreciation
(including depletion and amortization) was lower by 17.3% at Rs.7,226 Cr
against Rs.8,734 Cr in 9M FY12 due to lower production of oil & gas.
Interest cost
was higher at Rs.2,327 Cr as against Rs.1,899
Cr in 9M FY12 principally due to higher foreign borrowings and depreciation of
the Indian rupee. This resulted in gross interest cost being higher at Rs.
2,492 Cr as against Rs. 2,286 Cr in 9M FY12. Interest capitalized was lower at Rs.165
Cr as against Rs.387 Cr.
Profit after
tax was Rs.15,414 Cr as against Rs.15,804 Cr on
a Y-o-Y basis.
Basic EPS
for the 9 m/e 31st Dec,2012 was Rs. 47.5 against Rs.48.3 for the 9
m/e 31st,Dec,2011.
Outstanding
debt as on 31st December 2012 was Rs.72,266 Cr compared
to Rs.68,259 Cr as on 31st March 2012.
RIL
had cash and cash equivalents of Rs.80,962 Cr. These were in bank deposits and
CDs, mutual funds and Govt securities / bonds. RIL is debt free on a net basis
as at 31st Dec, 2012.
The
net capital expenditure towards projects for the 9 m/e 31st Dec,2012
was Rs.13,396 Cr. However, cash outflow on account of capital expenditure for
the 9 months amounted to Rs.7,423 Cr. Capital expenditure was principally on
account of expansions in the petrochemicals business.
During
the 9 months, RIL has bought and extinguished 4,25,62,849 equity shares for a
sum of Rs.3,085 Cr. During the quarter ending Dec,2012, RIL bought back
71,76,233 equity shares for a sum of Rs.565 Cr.
DOMESTIC
OPERATIONS
KG-D6
Cumulative
production from the block was 2.3 million barrels of crude oil, 0.3 million
barrels of condensate and 275 BCF of natural gas in 9M FY13, a reduction of
40%, 43% and 37% respectively on a Y-o-Y basis. The reduction in production was
due to reservoir complexity, natural decline and effect of shutdown in MA field
on account of FPSO maintenance for a period of 6 days.
Gas
produced from the block is being sold as per the Government’s Gas utilization
policy.
•
Achieved Cumulative Sales of 2,038 BCF (57.70 BCM) of Gas sales since
commencement
•
Sales for 9M of FY 12-13 stood at 271.76 BCF (7.70 BCM).
The
following initiatives have been undertaken in order to address the decline in
reservoir pressure and enhance the recovery in from the block:
•
Booster compressor and MEG up-gradation in D1-D3 field.
•
FPSO compressor modification, drilling and completion of additional gas well
and the
evaluation
of work-over in MA field.
With
regards to the Optimized Field Development Plan (Satellite 1) and R-Series:
•
Drilling operation commenced in the G2 Development Well part of Optimized Field
Development
Plan (OFDP).
Concept
validation and Front End Engineering Design (FEED) underway.
•
Development plan(s) submission for R-Series and other satellites based on
integrated
concept
targeted for 4Q FY13.
In
order to target resource upside, proposal for drilling exploratory well MJ-1
has been submitted and approvals are awaited.
Panna-Mukta and Tapti
(PMT)
These
fields produced 6.4 million barrels of crude oil and 54.6 BCF of natural gas in
9M FY13 – a reduction of 17% in case of crude oil & growth 2% in case of
natural gas on Y-o-Y basis. The decrease in oil was due to natural decline and
lower-than-expected oil gains from well interventions.
Increase
in gas production was due to higher gas-oil ratio.
Tapti
produced 0.4 MMBL of condensate and 36.2 BCF of natural gas in 9M FY-13 – a
decline of 36% and 37% respectively on Y-o-Y basis. The decrease was due to a
natural decline.
The
following projects have been undertaken in order to augment production:
–
Mid Tapti - 2 additional Extended Reach Drilling (ERD) wells put to production
and third is expected to be completed in 4Q 2013.
–
PannaMukta - 5 infill wells have been approved by the Management Committee to
be taken along with PannaL wells in FY14.
Other Domestic Blocks
There
is focus on maturing additional prospects in KG-D6, KG-D3, CY-D6 and CY-D5. The
following exploration campaigns have commenced:
•
Appraisal program for CY-D6 discovery D-53 is being reviewed by the MC
•
Commencement of 3D acquisition campaign in CY-D6 expected to complete in 4Q
FY13
•
Drill ready in CY-D6 Block – expected to spud after KG-D6 - G2 development well
During
the period, as part of portfolio rationalization steps, RIL has relinquished
the following blocks:
KG-DWN-2004/7
KG-D16
MN-DWN-2004/3
MN-D19
MN-DWN-2004/4
MN-D20
RIL’s
domestic E&P portfolio now consists of 10 exploration blocks excluding
KG-D6, CBM, PannaMukta and Tapti. These are Blocks NEC-25, GS-01, CY-III-D6,
CY-III-D5, KG-V-D3, CB-10-AB, KG-D13, MN-D17, MN-D18 and KG-D17
CBM BLOCKS
Subsurface and Surface facilities
design and studies are nearing completion. A proposal for CBM gas pricing
formulae based on price discovery has been submitted to MoPNG for its approval.
In addition, various key regulatory approvals are awaited prior to undertaking
further field development activities.
RIL has surrendered the Sonhat North
CBM Block due to non-availability of the environmental clearance.
RIL has several Divisions – and each
of them is progressing at its pace. The Telecom Foray in 4G is also Due – and is
awaited by all. RIL has Huge cash with it – to finance any of its ventures,
plus, capability to raise sufficient amount of Debt. If the Telecom Foray
clicks, it could be a huge revenue earner in the years to come. The current
quarter performance has been reasonably Good and further progress can be expected
in coming quarters.
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