Petrochemicals biz achieves record quarterly performance, RIL
Reliance Industries Limited (RIL) reported its financial performance for the quarter / nine months ended 31st December, 2010.
Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said:
“Reliance had another record quarter as both refining and petrochemical margins continued to improve and for certain products recorded historic levels. Robust demand growth in home markets and highly competitive assets enabled Reliance to have industry leading operating rates and margins.”
Turnover achieved for the nine months ended 31st December 2010 was Rs. 183,368 crore (US$ 41.0 billion), an increase of 30.9% over the corresponding period of the previous year. Increase in volume accounted for 15.3% growth in revenue and higher prices accounted for 15.6% growth in revenue. Exports were higher by 29.2% at Rs. 100,995 crore (US$ 22.6 billion) as against Rs. 78,182 crore (US$ 16.8 billion) in the corresponding period of the previous year.
Consumption of raw materials increased by 28.7% to Rs. 134,975 crore (US$ 30.2 billion) mainly on account of higher crude oil prices as well as higher volume of crude oil processed in the SEZ refinery. Purchases for traded goods decreased from Rs. 2,389 crore to Rs. 1,223 crore.
This was the best quarter ever for petrochemicals segment with respect to production, revenue and EBIT. Petrochemicals segment EBIT was at Rs. 2,429 crore, higher by about 9% over previous quarterly high of Rs. 2,222 crore in 4Q FY 0910. Performance of the segment reflects the strong domestic demand in most of the products and lower than expected impact on margins due to commissioning of new capacities, based on advantaged feed stock, in Middle East.
During the quarter, domestic demand for polyester products was higher by 10% as compared to corresponding period of the previous year. On the back of strong domestic demand growth, lack of adequate new capacities globally and historically high cotton prices, the polyester chain witnessed robust margin environment. POY / PSF deltas during the quarter were significantly above their 5 year averages. Similarly, deltas for fibre intermediates improved strongly on polyester strength during the last quarter and were also, above their 5 year averages.
During the nine months ended 31st December 2010, revenue for the segment increased by 13.0% from Rs. 39,803 crore (US$ 8.6 billion) to Rs. 44,961 crore (US$ 10.1 billion). Higher prices accounted for 11.5% growth in revenue and increase in volume accounted for 1.5% growth in revenue.
EBIT margins for the nine months ended 31st December 2010 were at 14.9% as compared to 16.0% in the corresponding period of the previous year due to base effect of higher revenues. On a trailing quarter basis, EBIT margins increased due to positive impact of significant margin improvement in most of the products in polyester chain, PP-Propylene and PBR. At the same time, some of the products like PE, PVC, Benzene, Butadiene and LAB witnessed stable to lower margins as compared to trailing quarter.