NEW DELHI: Reliance Industries Limited (RIL) on Friday reported a 15 per cent fall in it consolidated net profit for the second quarter (Q2) ended September 2020 mainly on account of dampened demand at its dominant oil refining and petrochemicals business.
The company posted a net profit of Rs 9,567 crore in Q2 as against a profit of Rs 11,262 crore posted in the same period last year.
In terms of quarter-on-quarter growth, RIL reported a 27.7 per cent decline in its net profit in the period under consideration as compared to Rs 13,233 crore recorded in the previous quarter ended June 30, 2020.
Reliance — which operates the world’s biggest oil refining complex — reported a 36 per cent dip in revenue from its refining business. While, revenue from its petrochemical business fell by 23 per cent.
Oil demand has collapsed as the COVID-19 pandemic disrupts global travel and business, hurting sales of refined products such as gasoline, diesel and jet fuel.
The firm’s twin refineries earned $5.7 per barrel on turning every barrel of crude oil into fuel, as compared to a gross refining margin (GRM) of $9.4 per barrel last year.
Overall, the oil-to-telecom conglomerate’s revenue from operations declined 24 per cent to Rs 1.16 lakh crore from Rs 1.53 lakh crore last year.
Commenting on the results, RIL chairman and managing director Mukesh Ambani said: “Domestic demand has sharply recovered across our O2C business and is now near pre-Covid level for most products. Retail business activity has normalised with strong growth in key consumption baskets as lockdowns ease across the country. With large capital raise in last six months across Jio and Retail business, we have welcomed several strategic and financial investors into Reliance family.”
The company’s retail division that sells everything from groceries to apparel suffered a 4.9% drop in revenue as the health crisis kept shoppers away. Still, the decline was less worse than the 17% fall recorded in the previous quarter.
Reliance said 85 per cent of its retail stores were open as of second quarter. It added 232 stores to take the total to 11,931 stores.
Ambani raised an unprecedented Rs 2.5 lakh crore since April from sale of stake in the digital and retail units and a rights issue. Of this, over Rs 1.76 lakh crore has already flowed into the company, helping it achieve net zero debt status.
Investors such as Facebook, Google and global private equity funds have picked up a cumulative 32.96 per cent stake in Jio Platforms for Rs 1.52 lakh crore. All the deals, except Google, have been completed, bringing Rs 1.18 lakh crore into the company.
Another Rs 37,710 crore was raised from the sale of an 8.48 per cent stake in its retail unit. Of this, Rs 7,500 crore has come in and the rest Rs 30,210 crore is pending.
Meanwhile, RIL’s telecom arm Jio Platforms posted nearly three-fold jump in its net profit to Rs 2,844 crore in Q2 as against a profit of Rs 990 crore in the corresponding period last year. While, its revenue from operations increased by 33 per cent to Rs 17,481 crore during the just-ended quarter, compared to Rs 13,130 crore in the same period of 2019-20.
The profit was mainly driven by ARPU uplift and strong customer addition, as it became the first operator outside China to surpass 400 million subscribers in a single market.
In an investor presentation, the company said the total customer base stood at 405.6 million of September 2020, making it the first operator outside China to surpass 400 million subscribers in a single country market.
The financial performance was “robust” despite COVID-related challenges and quarterly earnings before interest, tax, depreciation, and amortisation (EBITDA) run rate for Jio Platforms crossed USD 1 billion (over Rs 7,400 crore).
For Jio, net customer addition stood at 7.3 million.
The ARPU or earnings per subscriber – a key metric for the telecom companies – improved to Rs 145 in Q2FY21 from Rs 127.4 in the year-ago period, and about Rs 140 in the previous quarter.
Shares of Reliance closed 1.37 per cent higher at Rs 2,054 on the BSE. While, it finished 1.85 per cent lower at Rs 2,064 on the NSE.
(With agency inputs)