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RIL's Q1 FY18 petrochemicals revenue up 22.9% y-o-y
Jul '17
Reliance Industries Limited (RIL) has reported its financial performance for the quarter ended June 30, 2017. The revenue from the petrochemicals segment increased by 22.9 per cent year-on-year to Rs 25,461 crore ($3.9 billion), primarily due to increase in prices of PP, PVC, PTA and polyester and increase in volumes due to PX capacity addition at Jamnagar.

Petrochemicals segment EBIT increased sharply by 43.7 per cent to Rs 4,031 crore ($ 624 million), supported by favourable product deltas and volume growth. EBIT margin for the quarter was at 15.8 per cent, an all-time high level.

Among corporate highlights for the first quarter of fiscal 2017-18, RIL said that in June 2017 it announced the successful and flawless commissioning of the last crystallisation train (Train 3) of the Paraxylene (PX) complex at Jamnagar. This plant is built with state-of-the-art crystallisation technology from BP which is highly energy efficient. With the commissioning of this plant, RIL’s PX capacity has more than doubled making it world’s second largest producer of PX with about 11 per cent of global production.

Commenting on the results, Mukesh D Ambani, chairman and managing director, RIL said, “Our company recorded yet another strong quarterly performance with net profit of Rs 9,108 crore, up 28 per cent year-on-year. Our industry leading portfolio of assets in the refining and petrochemicals business contributed to considerable improvement in our earnings for the quarter. Retail business also witnessed accelerated growth momentum with YoY revenue growth of 74 per cent.

“Over the past 3-4 years, we made significant investments in new plants, thus creating organic growth platforms for our energy and materials businesses. Full commissioning of new PX facility at Jamnagar during the quarter will strengthen the integration within our polyester chain. Ramp-up of ethane import project has helped in diversifying feedstock sources and mitigating risks for our existing crackers at Dahej and Hazira. It is our constant endeavour to deliver world-class product and experience to Indian consumers through our retail and digital services businesses, which we believe are game changing initiatives.”

Analysing business environment update for polyester chain, the company said PX prices softened quarter-on-quarter (Q-o-Q) by 9 per cent in line with weak energy prices. PX-Naphtha delta was subdued on account of supplies in the region. PTA markets witnessed firm downstream demand and tight supplies owing to planned turnarounds at major plants. Low PTA inventory supported price sentiments. Prices were down Q-o-Q tracking soft upstream PX prices. However, PTA margins increased to $116/MT, above 5 year average level.

MEG prices witnessed downward trend at the beginning of the quarter which later started improving from mid quarter. Downstream buying remained strong, however, stable supply and adequate inventories in Chinese ports impacted prices which were down by 14 per cent Q-o-Q. MEG delta over naphtha declined 17 per ecnt Q-o-Q to $450/MT, but remained above 5 year average level.

Polyester demand continued to remain firm during the quarter amidst low inventory and healthy offtake. Polyester producers operated at higher utilisation rates to maintain adequate inventory. Operating rates of polyester fibre & yarn plants in China were in the range of 82-90 per cent during the quarter. PFY and PSF prices declined by 9 per cent Q-o-Q. PFY delta declined 11 per cent Q-o-Q to $ 245/MT. PSF market fundamentals remained stable amidst continued healthy demand from woven/nonwoven from western markets and support from firm cotton prices. PSF delta was down 11 per cent Q-o-Q to $137/MT due to relatively firmer PTA prices. (RKS)

Fibre2Fashion News Desk – India

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