Record earnings in petrochemicals, Reliance Industries

22 Apr '11

5 min read

Petrochemicals Business

The petrochemicals segment recorded its highest ever EBIT for the year at Rs. 9,305 crore ($ 2.1 billion), an increase of 8% on y-o-y basis. EBIT margin for the year was at 14.7% as compared to 15.5% in the previous year due to base effect of higher revenues. Margin improvement in the polyester chain, polypropylene and rubber products was partly offset by lower margin in polyethylene (PE).

For FY11, revenue for the segment increased by 14% to Rs. 63,155 crore ($ 14.2 billion) from Rs. 55,251 crore. Of this, higher prices contributed 13% of growth while volumes contributed 1%.

The segment also recorded highest ever quarterly EBIT of Rs. 2,626 crore ($ 589 million), an increase of 18% on y-o-y basis and 8% on a trailing quarter basis. EBIT margin for the quarter remained unchanged at 14.4% as compared to the same quarter last year. Performance of the segment reflects strong domestic demand across the petrochemical range during the quarter.

For 4Q FY11, revenues increased by 18% to Rs. 18,194 crore ($ 4.1 billion) from Rs. 15,448 crore on account of higher prices.

On a year-on-year basis, deltas for PBR-BD, Butadiene – LPG and Acrylonitrile – Propylene were significantly higher, with increases ranging from 60 to 100%.

The integrated polyester chain witnessed its highest margin in over a decade. 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. For 4Q FY11 the international deltas across the polyester chain increased by between 25-50% for products like POY, PSF and PET. For the full year, the international polyester chain delta increased by 20 to 40% across various products. Both standalone fibre producers and integrated polyester chain producers benefitted from widening deltas during the year.

During the year, domestic demand for polyester products was higher by 13% as compared to previous year with strong demand from the non-apparel applications like home furnishing and technical textiles. Consumption for PET grew by 24% on the back of strong demand from bottled water and beverages packaging segment.

During the year, production of fibre intermediates (PX, PTA and MEG) decreased by 2% to 4.5 million tonnes due to a planned shutdown in PX plants at Jamnagar and Patalganga and replacement of MEG catalyst at Hazira, Baroda and Gandhar plants. Polyester (PFY, PSF and PET) production volumes increased by 3% to 1.7 million tonnes. RIL has maintained its focus on specialty products which accounted for 57% and 45% of PSF and PFY production respectively.

The polymer business saw a mixed trend in terms of product margins during the year despite strong demand across key polymers.

Due to cracker shutdown at Hazira, Nagothane and Gandhar, the production of ethylene decreased by 8% to 1.69 million tonnes while the production of propylene decreased by 5% to 0.7 million tonnes as compared to the previous year. Polymer (PP, PE and PVC) production remained flat at 4.1 million tonnes for the year.

Click here for more details

Reliance Industries Limited (RIL)

More Reliance Industries Limited News... More Textiles News - India...