RIL profit up 31% in Q1 on heels of BP deal, strong showing by Jio
Reliance Industries on Thursday reported a 31 per cent year-on-year rise in net profit for the first quarter, derived from a one-time gain from the sale of stake in its petro retail business to BP and higher profits in Jio, which helped offset the impact of COVID-19 in most other segments.
In the quarter ended June 30, RIL’s net profit stood at Rs 13,248 crore, compared with Rs 10,141 crore in the year ago quarter.
RIL had signed agreements with UK’s BP Global Investments in December 2019 to sell a 49 per cent stake in the petroleum products retail marketing business and form Reliance BP Mobility Limited (RBML). In the last quarter, following receipt of requisite regulatory approvals, the company recognised an exceptional gain of Rs 4,966 crore.
RIL’s quarterly revenue stood at Rs 100,929 crore, a 42 per cent decline from the year ago revenue of Rs 174,087 crore.
Reliance Jio Infocomm, which is the country’s largest telecom company, reported a net profit of Rs 2,520 crore in the April-June quarter, up 183 per cent from Rs 891 crore a year ago.
However, many of its other businesses, including refining, oil and gas and retail were impacted by the COVID-19 pandemic and the nationwide lockdown that was imposed over April-May.
“The severe demand destruction due to global lockdowns impacted our hydrocarbons business but the flexibility in our operations enabled us to operate at near normal levels and deliver industry-leading results,” said Mukesh Ambani, chairman and MD of Reliance Industries.
While revenue in RIL’s petrochemicals segment tumbled 33 per cent year-on-year to Rs 25,192 crore, the same in the refining and marketing segment more than halved to Rs 46,642 crore from Rs 101,721 crore.
“Global oil demand for the quarter is estimated to have contracted sharply by 16.4 million barrels per day due to lockdowns and travel restrictions globally. India oil product demand also declined sharply by 25.8 per cent YoY during the quarter,” RIL noted.
Similarly, oil and gas exploration and production business revenue fell 45 per cent and the segment reported earnings before interest, taxes, depreciation and amortization loss of Rs 32 crore.
Due to the lockdown, RIL’s retail segment revenue slipped 17 per cent from a year ago to Rs 31,633 crore and segment EBITDA was 47 per cent lower at Rs 1,083 crore.
Currently, RIL operates 11,806 retail stores. The company said that half of its stores were completely shut in the lockdown, while 29 per cent only partially operated. The consumer electronics and fashion businesses were particularly hit hard due to the lockdown. However, once the lockdown started lifting in various parts of the country, demand for home appliances and products such as laptops and tablets more than doubled.
Even in the media business, revenue fell 35 per cent to Rs 807 crore on an EBITDA of Rs 27 crore, which was 41 per cent lower; the decline was “primarily due to the COVID-19 linked clampdown on spending by advertisers, particularly in entertainment segment,” RIL noted.
In the April-June quarter, Jio Platforms raised Rs 1.52 lakh crore from 13 investors, including Facebook and Google. Post completion of these investments, RIL will hold 66.48 per cent stake in Jio Platforms. Of the total investment, Rs 115,694 crore has already been received and Jio Platforms will retain Rs 22,981 crore to drive future growth, RIL said.