Reliance net profit rises 9%, planned shutdown at oil refinery subdues earnings

Reliance Industries Ltd on Friday reported a 9 per cent rise in its December quarter net profit as a planned maintenance-induced weakness in oil business earnings was offset by stability in retail and telecom verticals.

The oil-to-retail-to-telecom conglomerate's consolidated net profit of Rs 17,265 crore, or Rs 25.52 per share, in October-December - the third quarter of the current 2023-24 fiscal - was 9.3 per cent higher than Rs 15,792 crore, or Rs 23.19 a share, earning a year back, according to a company statement.

Quarter-on-quarter, the profit was lower when compared to Rs 17,394 crore earnings in the preceding three months ended September 30.

Primarily the oil-to-chemicals (O2C) business, the main milch cow, saw subdued earnings on accounts of a planned maintenance and inspection shutdown, lasting up to seven weeks of key units in the giant refining complex in Jamnagar, which cut the run rate.

While quarterly EBITDA was up 16.7 per cent year-on-year to Rs 44,678 crore with growth across all businesses, the revenue from operations was almost flat at Rs 2.2 lakh crore.

The firm helmed by billionaire Mukesh Ambani saw retail business seeing record footfalls leading to highest ever quarterly revenue and pre-tax profit (EBITDA).

Telecom revenues soared as it outpaced competition in subscriber addition and higher data traffic.

The mainstay oil refining and petrochemicals business, called O2C, posted a 2.4 per cent fall in revenue and an EBITDA of Rs 14,064 crore, which was 1 per cent higher year-on-year but lower than Rs 16,281 crore of the preceding July-September quarter.

"Planned maintenance and inspection shutdown of CDU, FCCU, delayed coking and ROGC complex impacted yields and profitability.

"O2C EBITDA would have been higher on year-on-year and comparable on quarter-on-quarter basis if all major units were available during the quarter," the firm said.

With the consumer base swelling to 470.9 million from 459.7 million at the end of September on a flat per-user revenues of Rs 181.7, Reliance Jio Infocomm Ltd - the digital services business - posted an 11.6 per cent rise in net profit to Rs 5,445 crore in Q3.

Also aiding the business rise in data traffic to 38.1 billion GB in October-December from 36.3 billion GB in the preceding quarter.

Profits from the retail business climbed 40 per cent to Rs 3,165 crore as store count rose to 18,774 from 18,650.

Store footfalls surged to 282 million from 260 million in July-September 2023 and 201 million in October-December 2022.

Grocery delivered 1 per cent growth while festival sales led to robust demand across categories.

Oil and gas EBITDA soared 50 per cent to Rs 5,804 crore as higher gas volumes partly offset lower price realisation.

The firm's flagship KG-D6 block in Krishna Godavari basin in the Bay of Bengal is now producing about 30 million standard cubic metres per day of gas and 21,000 barrels a day of oil/condensate.

The company said its outstanding debt rose to Rs 3.11 lakh crore from Rs 2.95 lakh crore in September-end.

Mukesh D Ambani, chairman and managing director, of Reliance Industries Limited, said Jio has completed in India the fastest rollout of True 5G services anywhere in the world.

"Every city, town, and village in the country is now equipped with high-speed digital connectivity, which will usher in a new era of unparalleled digital accessibility and technology-led growth.

"The strong uptake of the JioBharat phone and JioAirFiber services has resulted in the continued expansion of Jio's subscriber base, contributing to the stellar growth numbers of the digital services business."

The retail segment has also delivered an impressive financial performance with its rapidly expanding physical as well as digital footprint, he said.

"Reliance Retail remains focused on enriching customer shopping experience by adding new brands and offerings to its portfolio.

"Its New Commerce initiatives continue to support the growth journey of millions of small merchants through technology, generating immense societal value."

Ambani said the oil and gas segment posted its highest-ever quarterly EBITDA.

"I am happy to note that KG-D6 is now contributing 30 per cent of India's gas production, fueling its transition towards a greener and cleaner tomorrow."

The O2C segment, he said, delivered resilient performance aided by operational flexibility and strong domestic demand.

"The new energy giga complex is all set to be commissioned in the second half of CY24.

"I am confident that Reliance's new energy business will play a pivotal role in the global movement for adoption of cleaner fuels," he added.

Reliance had on September 14 announced the shutdown of certain refinery units for planned maintenance and inspection.

These were crude distillation unit and one delayed coking in SEZ refinery for about 4 weeks starting from the fourth week of September 2023; fluidised catalytic cracker in DTA refinery for about 7 weeks starting from mid-September 2023; and refinery off-gas cracker for about 4 weeks starting from the last week of September 2023.

Reliance's consolidated net debt stood at Rs 1,19,372 crore, which is 67 per cent of the annualised EBITDA.

Jio added 11.2 million net subscribers and its per-user revenue increased 2 per cent year-on-year.

Akash M Ambani, chairman of Reliance Jio Infocomm said, "Jio has accomplished the fastest rollout of 5G technology witnessed anywhere in the world and is now available across India.

"JioAirFiber has seen strong initial demand and customer engagement, especially in underserved tier 3/4 towns and rural areas."

Reliance Retail posted a record-high quarterly revenue at Rs 83,063 crore, up 22.8 per cent year-on-year led by grocery, fashion and lifestyle and consumer electronics businesses.

Isha M Ambani, executive director, Reliance Retail Ventures Limited said, "Reliance Retail has delivered steady performance during the festive quarter.

"Our business success is intricately woven into the larger fabric of India's economic growth, and together, we are shaping a compelling story of innovation and world-class possibilities for the future."