Billionaire Mukesh Ambani’s Reliance Industries Ltd on Friday reported a 15 per cent drop in second quarter net profit after the pandemic-hit oil demand dragged down continued good showing in consumer-facing businesses such as telecom.
Consolidated net profit attributable to owners at Rs 9,567 crore in July-September compared with Rs 11,262 crore a year back, Reliance said in a inventory exchange filing.
A plunge in fuel demand after the raging pandemic forced people to stay home and stifled the economy dealt a body blow to the firm’s traditional cash cow oil refining and petrochemicals, even as consumer-facing businesses, which account for 35 per cent of the oil-to-telecom-to-retail conglomerate’s revenues, continued to do mannered.
Its digital services and products, which includes the telecom arm Jio, saw standalone net profit swell to Rs 2,844 crore in the second one quarter of current fiscal (April 2020 to March 2021) from Rs 990 crore a year back.
This after the four-year-old Jio’s subscriber base grew to 406 million, the largest in India.
Net addition of 7.3 million subscribers and per-user revenue rising to Rs 145 helped the telecom commerce soar.
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The gradually ‘unlock’ that has seen markets and malls reopen helped the company’s retail commerce recuperate with nearly flat revenue and a 14 per cent lower EBITDA of Rs 2,009 crore.
Reliance said 85 per cent of its retail stores were open as of second quarter. It added 232 stores to take the complete to 11,931 stores.
Ambani raised an unprecedented Rs 2.5 trillion since April from sale of stake in the digital and retail units and a rights issue. Of this, over Rs 1.76 trillion has already flowed into the company, helping it achieve net zero debt status.
Petrochemicals revenue fell 23 per cent to Rs 29,665 crore and pre-tax profit dropped 33 per cent at Rs 5,964 crore.
Refining EBITA nearly halved to Rs 3,002 crore as revenue slumped 36 per cent.
The firm’s twin refineries earned $5.7 per barrel on turning each and every barrel of crude oil into fuel, as in comparison to a gross refining margin (GRM) of $9.4 per barrel final year.
The profit in Q2 was once lower sequentially in addition to the April-June earning of Rs 13,248 crore included one-time gain of Rs 7,629 crore from sale of 49 per cent stake in petro retailing commerce to BP.
Investors such as Facebook, Google and global private fairness funds have picked up a cumulative 32.96 per cent stake in Jio Platforms for Rs 1.52 trillion. All of the deals, apart from Google, have been completed, bringing Rs 1.18 trillion into the company.
Another Rs 37,710 crore was once 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.
But even so, the company had raised Rs 52,124 crore through a rights issue and another Rs 7,629 crore from sale of 49 per cent in fuel retail commerce to BP. Of the rights issue, Rs 13,275 crore has already come in and the remaining Rs 39,849 crore is due next year. All the BP money has been paid.
The firm had a gross debt of Rs 279,251 crore as of September 30, down from Rs 336,294 crore in the preceding quarter. After considering Rs 185,711 crore of cash and Rs 30,210 crore received from stake sale deals that have closed and another Rs 73,586 crore pending from the strategic investors, the firm had a surplus of Rs 10,250 crore.
Commenting on the results, Reliance Industries Chairman and Managing Director Mukesh Ambani said, “We delivered strong overall operational and financial performance in comparison to the preceding quarter with recovery in petrochemicals and retail segment and sustain growth in the digital services and products commerce.” “Domestic demand has sharply retrieved across our oil-to-chemical (O2C) commerce and is now close the pre-Covid level for most products. Retail commerce activity has normalised with strong growth in key consumption baskets as lockdown ease across the country,” he said.
With large capital raise in the final six months across Jio and retail commerce, several strategic and financial investors have joined the Reliance circle of relatives, he added.
“We continue to pursue growth initiatives in each and every of our businesses with a focus on the India possibility,” he further said.