The Hindu Business Line : Higher refining margins push Reliance Ind Q1 net up 61 pc

A GOOD performance by its refining business, which also reported a 40 per cent increase in exports (including deemed exports), helped Reliance Industries clock a 61 per cent increase in net profitfor the first quarter ended June 30, 2005.

Net profit amounted to Rs 2,310 crore against Rs 1,437 crore in the corresponding quarter of the previous fiscal.

Turnover at Rs 19,884 crore (Rs 15,746 crore), was up 26 per cent.

The increase in sales reflects the impact of increase in product selling prices of 21 per cent and increase in volumes of 5 per cent compared with the same year-ago quarter, said a news release from the company.

Operating profit at Rs 3,760 crore rose 19 per cent.

And cash profit at Rs 3,277 crore increased by 28 per cent.

The company's net operating margins, at 20 per cent, improved during the quarter despite volatile raw material prices which were offset by higher selling prices and efficient cost control measures, the company said.

Other income decreased to Rs 194 crore, from Rs 347 crore, on account of exercise of the option to convert the preference shares of Reliance Infocomm with effect from April 1, 2005.

This was partially offset by higher interest income from liquid investment and fixed deposits, said the news release.

Interest expenditure, at Rs 237 crore, showed a 49 per cent decrease due to appreciation of the rupee and reduction in debt; depreciation amounted to Rs 791 crore (Rs 961 crore), because of assets sold during 2004-05 and impact of depreciation on petrochemical assets.

Production of oil, gas and petrochemicals, including toll conversion, was fairly stagnant at 3.18 million tonnes (3.19 million tonnes).

The company's refinery operated at 96 per cent capacity processing 7.92 million tonnes of crude during the quarter. Exports increased to Rs 7,144 crore (Rs 5,102 crore)

Refinery margins were robust in all the regions as product price increases were higher than the concomitant rise in crude oil prices.

But results from petrochemicals were near stagnant at Rs 882 crore (Rs 886 crore), although revenue-wise it showed a modest growth increasing to Rs 6,670 crore from Rs 6,467 crore.

The company has included provision for Fringe Benefit Tax at Rs 5 crore for the quarter.

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