'Reliance Inds performed commendably in Q3', Mr. Ambani, CMD

22 Jan '09

8 min read

• The capital expenditure for the period was Rs. 18,109 crore (US$ 3.7 billion) primarily in oil and gas business.

COMMENTING ON THE RESULTS, MUKESH D. AMBANI, CMD, RELIANCE INDUSTRIES LIMITED SAID:
"This was one of the most challenging quarters for Reliance with volatility in prices and margins. Producers and consumers are coming to terms with slower global trade and economic outlook. Reliance performed commendably in this environment, with high operating rates. We also reached an important milestone in start up of the RPL refinery."

KEY BUSINESS UPDATES CORPORATE:
• RIL continues to be amongst the 30 fastest climbers in the 2008 list of Global Fortune 500 Companies. RIL's new rankings across various parameters were as follows:
• Rank 206 based on Sales
• Rank 103 based on Profits

REFINING & MARKETING BUSINESS:
As an international refiner, RIL's refining margins are influenced by the volatile margin scenario witnessed by the industry globally. RIL managed to sustain its margins primarily on the back of efficient sourcing of crude oil, ability to produce globally accepted products and flexibility in its crude bucket, product slate and evacuation infrastructure.

As RIL expands its footprint in the R&M sector through the commissioning of the RPL, it has also undertaken the task of increasing the competitiveness of its existing operating refinery. Towards this, various capital expenditure schemes are under implementation at the existing EOU refinery.

The primary drivers of the schemes are to improve crude processing flexibility, meet more stringent fuel specifications and improvement in yields and efficiencies. While extensive evaluation runs were conducted to arrive at the quantum of modifications, some of these schemes required changes in running units and necessitated short shutdowns of these units to implement the modifications in a safe manner.

Consequently, the crude quantity processed during the quarter was lower at 7.87 million tonnes as compared to 8.21 million tonnes in the trailing quarter. During the quarter ended 31st December 2008, RIL's GRM decreased on a Y-o-Y basis from US$ 15.4 / bbl to US$ 10.0 / bbl. RIL refinery maintained a premium of US$ 6.4 / bbl over Singapore complex GRM. EBIT for the refining business was at Rs 1,881 crore, a decrease of 28% while EBIT margin decreased to 8.7% as compared to 10.0% in the corresponding period of the previous year. This reduction is attributed to reduction in refinery GRM.

The GRM for the nine month period was at US$ 12.9 / bbl as against US$ 14.9 / bbl in the corresponding period of the previous year. During the same period, EBIT for the refining business was at Rs 7,695 crore, an increase of 3% while EBIT margin decreased to 8.5% as compared to 10.4% in the corresponding period of the previous year. The decrease in EBIT margin is primarily due to base effect on account of historical high prices witnessed during the first half of FY 2008-09.

More Textiles News - India...