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Informist, Friday, Jul 19, 2024

 

--RIL: Apr-Jun consol net profit 151.38 bln rupees
--RIL: Analysts saw RIL Apr-Jun consol net profit 165.43 bln rupees
--RIL: Apr-Jun consol revenue 2.36 trln rupees
--RIL: Apr-Jun consol net profit 151.38 bln rupees vs 160.11 bln
--RIL: Apr-Jun consol revenue 2.36 trln rupees vs 2.11 trln
--RIL: Apr-Jun oil-to-chemicals sales 1.571 trln rupees vs 1.33 trln
--RIL: Apr-Jun oil-to-chemicals EBITDA 130.93 bln rupees vs 152.86 bln
--RIL: Apr-Jun oil and gas EBITDA 52.10 bln rupees vs 40.15 bln
--RIL: Apr-Jun retail sales 756.30 bln rupees vs 699.62 bln rupees
--RIL: Apr-Jun oil and gas sales 61.79 bln rupees vs 46.32 bln rupees
--RIL: Apr-Jun digital svcs EBITDA 149.44 bln rupees vs 137.22 bln
--RIL: Apr-Jun digital svcs sales 354.70 bln rupees vs 320.77 bln
--RIL: Apr-Jun retail EBITDA 56.72 bln rupees vs 51.39 bln rupees
--RIL: Apr-Jun consol EBITDA margin 16.6% vs 18.1% year ago
--RIL: Apr-Jun consol EBITDA 427.48 bln rupees, up 2% on year
--RIL: Retail Apr-Jun consol EBITDA margin 8.5%, up 30 bps on year
--RIL: RJio Apr-Jun ARPU 181.7 rupees, unch on qtr
--RIL: Apr-Jun oil-to-chemicals EBITDA margin 8.3%, dn 320 bps on yr
--RIL: Apr-Jun oil and gas EBITDA margin 84.3%, down 240 bps on year
--RIL: Apr-Jun oil-to-chemicals ops total throughput 19.8 mln tn
--RIL: RJio customer base 489.7 mln on Jun 30 vs 481.8 mln qtr ago
--RIL: Apr-Jun oil-to-chemicals ops total throughput up 0.5% on year
--RIL: RJio Apr-Jun data traffic 44.1 bln GB vs 40.9 bln GB qtr ago
--RIL: Apr-Jun oil-to-chemicals total output for sale 17.7 mln tn
--RIL: Apr-Jun oil-to-chemicals total output for sale up 2.9% on year
--RIL: Reliance Retail total store count at 18,918 as on Jun 30
--RIL: Jio Platforms' Apr-Jun EBITDA margin 49.7%, unch from qtr ago
--RIL: Reliance Retail store footfalls 296 mln in Apr-Jun, up 19% YoY
--RIL: RJio Apr-Jun depreciation up due to higher network utilisation
--RIL: RJio Apr-Jun depreciation up due to addition to gross block
--RIL: Apr-Jun capex 287.85 bln rupees vs 396.45 bln year ago
--RIL: Consol cash, cash equivalents as on Jun 30 at 1.93 trln rupees

--RIL: Apr-Jun oil-to-chemical ops muted on tough operating environ
--RIL: Energy mkt volatility impacting short-term oil-to-chemicals sales
--RIL: Expanding Jio wallet share across connectivity beyond BFSI
--RIL: Subscriber growth drove RJio operating revenue in Apr-Jun
--RIL: India gas demand resilient amid high global prices
--RIL: Firm demand for fuel, petroleum products to aid oil-to-chemical ops

 

By Sayantan Sarkar

 

NEW DELHI – The Apr-Jun earnings of index heavyweight Reliance Industries Ltd missed the Street's expectations as robust performance of retail and telecom sectors were offset by lower profitability of the oil-to-chemicals vertical. The company posted a consolidated net profit of 151.38 bln rupees, significantly lower than analysts' expectations of 165.43 bln rupees. 

 

Additionally, the company's bottomline fell 5.5% on a year-on-year basis and as much as 20% sequentially. In the Jan-Mar quarter, RIL had posted a consolidated net profit of 189.51 bln rupees. 

 

However, the oil-to-telecom conglomerate's consolidated revenue from operations grew 12% on year to 2.36 trln rupees, beating analysts' estimate of 2.31 trln rupees. The company said the topline for the June quarter was supported by higher oil and product prices and strong growth in volumes in the oil and gas business segment, according to a media release. "Steady growth in consumer businesses also contributed to increase in revenue," RIL said. 

 

The consolidated cash profit from operations, or earnings before interest, tax, depreciation and amortisation, rose 2% on year to 427.48 bln rupees, comfortably beating the Street's estimate of 396.85 bln rupees. The metric was driven by strong contributions from the oil and gas, and consumer-facing businesses.

 

Among all the business segments, RIL's oil and gas vertical reported the largest increase in earnings before interest, taxes, depreciation and amortisation. The vertical's EBITDA surged 29.8% on-year to 52.10 bln rupees. The cash profit from retail operations rose 10.5% on year in Apr-Jun, and that from the digital services segment grew 11.6%. In the case of oil-to-chemicals vertical, EBITDA fell 14.3% on year during the June quarter.

 

Consequently, the consolidated EBITDA margin for the quarter was 16.6%, as against 18.1% a year ago. In the March quarter, the consolidated EBITDA margin was 17.8%, according to the release.

 

In Apr-Jun, the company's total expenses rose 14% on year to 2.17 trln rupees with depreciation and amortisation increasing 15% to 135.96 bln rupees. Cost of materials consumed rose 14% on year to 1.09 trln rupees. 

 

During the quarter, the company's total cash and cash equivalents were 1.93 trln rupees against 1.92 trln rupees in the year-ago period. Capital expenditure was 287.85 bln rupees compared with 396.45 bln rupees in the same quarter last year.

 

Today, shares of RIL closed nearly 2% lower at 3,110.30 rupees on the National Stock Exchange.

 

DIGITAL

Reliance Jio Infocomm Ltd reported a sequential increase of 2.0% in its net profit for the quarter ended June to 54.45 bln rupees, while its revenue for the same period also rose by 2.0% to 264.78 bln rupees.

 

All key expenses for Reliance Jio, such as network operating costs and licence fees, increased on a sequential basis for Apr-Jun, barring other expenses. Reliance Jio's network operating cost for the reporting quarter was 79.23 bln rupees, higher than 78.66 bln rupees in Jan-Mar. The company paid out 24.33 bln rupees by way of licence fees, higher than the 23.89 bln rupees in the March quarter. 

 

Reliance Jio Infocomm's depreciation and amortisation costs rose slightly during the June quarter to 56.07 bln rupees, against 55.66 bln rupees in Jan-Mar. Overall expenses during the quarter amounted to 192.66 bln rupees, against 189.17 bln rupees in Jan-Mar. 

 

The company's net profit for Apr-Jun rose 12% on year, while the topline grew 10% from the same period last year. Additionally, the company's operating margin rose slightly to 26.7% from 26.3% in the previous quarter. In the year-ago period, the operating margin was 26.2%.                                    

Reliance Jio's average revenue per user during the quarter was unchanged on a sequential basis at 181.7 rupees. Its customer base increased over the same period to 489.7 mln, against 481.8 mln at the end of Jan-Mar. In a release, Reliance Industries Chairman and Managing Director Mukesh Ambani said, "Jio's True 5G network, covering ~85% of India's 5G capacity, continues to attract users, while the fixed broadband offerings are witnessing increasing consumer traction both in homes and enterprises".

 

The company said growth in the subscriber base aided the business segment's operating margin during the June quarter. In a post-earnings conference call, the company also said it is looking at expanding the Jio wallet share across connectivity beyond banking, financial services and insurance. Additionally, sales during the quarter were 354.70 bln rupees, up from 320.77 bln rupees last year. 

 

Reliance Jio said the average revenue per user remained unchanged, and was partially offset by an increasing mix of promotional 5G traffic being offered on an unlimited basis to subscribers and not charged separately. On a sequential basis, the company's data traffic was up to 44.1 bln GB from 40.9 bln GB in Jan-Mar.

 

RETAIL

Increasing footfall and number of stores, and streamlining operations helped Reliance Retail Ventures Ltd report strong Apr-Jun earnings.

 

Second-largest in terms of revenue, RIL's retail division managed to post a consolidated revenue growth of 6.6% on-year to 662.60 bln rupees. The revenue missed estimates by some brokerage houses such as YES Securities, which had pegged the topline at 797.8 bln rupees. 

India's largest retailer clocked a net profit of 25.49 bln rupees for the June quarter, up 4.6% on year. Earnings before interest, taxes, depreciation, and amortisation were 56.64 bln rupees, up 10.5% on year, with EBITDA margin rising by 30 basis points from the previous year to 8.5%.

 

The company accounts for over 30% of RIL's revenue, and operates grocery, consumer electronics, and lifestyle stores such as Reliance Fresh, Reliance Smart, Reliance Digital, Reliance Trends, Hamleys, and AJIO.com.

 

The company opened 331 new stores in the June quarter, taking the total store count to 18,918 as on Jun 30. A higher store count and footfall translated to a higher number of transactions, which increased 6.4% on year to 334 mln. The company's customer footfall was 296 mln across formats, and the registered customer base was 316 mln in Apr-Jun. "The focus on scaling up Digital Commerce and New Commerce continued with these channels contributing to 18% of total revenue," RIL said in the release. Total sales from this vertical during Apr-Jun were 756.30 bln rupees against 699.62 bln rupees a year ago. 

 

OIL-TO-CHEMICALS

The revenue from the company's largest vertical grew 18.1% on-year to 1.57 trln rupees in Apr-Jun primarily on account of higher product prices, tracking a 9% increase in Brent crude oil prices, and higher volumes supported by strong domestic demand, the company said. However, the vertical's cash profit from operations, or EBITDA, fell 14.3% year-on-year to 130.9 bln rupees. This is the only vertical where the EBITDA witnessed a decline. The business segment's EBITDA margin fell to 8.3% in Apr-Jun compared with 11.5% in the year-ago period. In Jan-Mar, the vertical's EBITDA margin was 11.8%. The company said the fall in EBITDA was due to lower transportation fuel cracks, particularly petrol cracks, which were down 30% from the same quarter last year. 

 

Brent crude oil prices averaged $84.97 a barrel in the June quarter, up $6.9 a bbl from the same quarter in 2023. "Crude oil benchmarks rose Y-o-Y due to continuing production cuts by OPEC+ (Organization of the Petroleum Exporting Countries and allies), rising geopolitical tensions in the Middle East and attacks on vessels in the Red Sea," the company said. 

 

Among the transportation fuels, the company said Singapore Gasoline 92 RON cracks fell to $8.5 per bbl year-on-year in the June quarter from $12.1 a bbl in the year-ago period. The lower cracks were due to higher quotas of exports from China and muted Chinese gasoline demand with an increase in penetrations in electric vehicles. Singapore Gasoil 10-ppm cracks also fell during the quarter due to weak demand and the ramp-up of new refineries in West Asia and West Africa. 

 

In a post-earnings conference call, RIL said firm domestic demand for fuel and petroleum products is likely to aid the oil-to-chemical business segment in the coming quarter. However, it also said volatility in the global energy markets affected the vertical's sales during the quarter amid tough operating environment. 

 

The company said total crude oil throughput during the June quarter rose slightly to 19.8 mln tn from 19.7 mln tn in the year-ago period. Total throughput was flat on a sequential basis. Production meant for sale was 17.7 mln tn during Apr-Jun, which was higher than 17.2 mln tn in the same quarter last year. 

 

Sales from RIL's oil-to-chemicals segment during the quarter ended June were 1.57 trln rupees against 1.33 trln rupees.  

 

OIL & GAS

Business from the exploration and production segment surged 33.4% year-on-year in Apr-Jun to 61.79 bln rupees, mainly on account of higher volumes, which was partly offset by lower price realisation from the KG-D6 and coal bed methane fields, the company said.  

 

The segment's EBITDA increased 29.8% year-on-year to 52.10 bln rupees in the quarter ended June. The EBITDA margin, however, fell to 84.3% from 86.7% a year ago.

 

The average price realised for KG-D6 gas was $9.27 per mBtu in Apr-Jun, compared with $10.81 per mBtu in the year-ago period. The average price realised for coal bed methane gas for the quarter was $11.59 per mBtu, against $14.15 per mBtu in Apr-Jun 2023. "The oil and gas segment continued its growth trajectory with higher production, offsetting lower year-on-year gas price realizations," Mukesh Ambani, chairman and managing director of RIL, said in the media release. 

 

"Reliance has made significant progress on the implementation of New Energy Giga-factories. On completion, these projects will provide India (with) a world-class, integrated green energy ecosystem which can propel the next leg of sustainable growth," Ambani further said in the release. 

 

In the post-earnings call, the company said India's natural gas demand remains resilient amid higher global prices. The KG-D6 block is currently producing 30 mln standard cubic mtr per day of gas and 23,000 bbl of oil and condensate, the company said in the filing. In Apr-Jun, production from the block was 28.7 mscmd of gas, and 21,640 bbl per day of oil and condensate. 

 

During the quarter, the vertical's sales were 61.79 bln rupees compared with 46.32 bln rupees in the year-ago period.  End

 

US$1 = 83.66 rupees

 

Edited by Deepshikha Bhardwaj

 

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