Reliance Industries (RIL) on Friday reported an 11 per cent drop in consolidated net profit for the quarter ended June 30, 2023. Mukesh Ambani-led Reliance reported a consolidated net profit of Rs 16,011 crore for the first quarter of FY24 down from Rs 17,955 crore reported in the same period last year. The company said this drop in profit was mainly on account of "higher finance cost and increased depreciation."
In a regulatory filing, the company said, “Revenue from operations fell to Rs 2.1 trillion from Rs 2.22 trillion in the year-ago period and Rs 2.16 trillion in January-March 2023."
On Friday, Reliance Industries' stock fell 2.57 per cent to Rs 2536.20 a piece on the BSE. The company's board has declared a dividend of Rs 9 per equity share for FY23.
The company said that the revenue fell primarily on account of a sharp reduction in crude oil prices and lower price realisation of downstream products. This was partially offset by higher volumes. Oil-to-chemical (O2C) was impacted by a 60-70 per cent year-on-year (YoY) decline in fuel cracks due to the energy market dislocation.
The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at Rs 38,093 crore in Q1 FY24 against Rs 37,997 crore reported in Q1 FY22. EBITDA margin stood at 18.3 per cent.
"EBITDA growth was led by consumer and upstream businesses, which offset decline in O2C earnings. O2C earnings were lower due to a sharp fall in fuel cracks from exceptionally high levels in 1Q FY23. Higher subscriber base and customer engagement led revenue and profitability growth for Digital Services. Retail earnings reflect expanded footprint and improved profitability with operating leverage. Higher production and realizations contributed to growth in Oil & Gas EBITDA," RIL said in the exchange filing.
Chairman Mukesh Ambani said, "Reliance’s strong operating and financial performance this quarter demonstrates the resilience of our diversified portfolio of businesses that cater to demand across industrial and consumer segments."
Reliance’s Oil To Chemical (O2C) Segment Revenue Falls 17.7 Per Cent
In Q1 FY24, Reliance’s Oil To Chemical (O2C) Segment revenue stood at Rs. 133,031 crores ($16.2 billion), showing a decline of 17.7 per cent year-on-year. The quarterly EBITDA stood at Rs. 15,271 crores ($1.9 billion), down by 23.2 per cent year-on-year.
Revenue fell due to lower crude oil prices and downstream product prices. Increased volumes helped partly offset this. Explaining the decline in revenue, the company said that last year, due to rising demand, low inventories, and disruptions in the oil market caused by Russia's invasion of Ukraine, the difference between the price of crude oil and refined petroleum products (known as "cracks") reached record levels. In June last year, diesel cracks surged to $74.95 a barrel, petrol cracks neared $42, and jet fuel cracks soared to $62.
However, this year, diesel cracks in June were between $16 and $19, and petrol cracks ranged from $10 to $14. The drop in demand was influenced by destocking due to recessionary fears, high-interest rates, and slower-than-expected growth in China's markets. As a result, exports fell by 28 per cent.
Reliance Jio Q1 Net Profit Rises 12 Per Cent
RIL's telecom arm Reliance Jio posted over a 12 per cent rise in net profit to Rs 4,863 crore in Q1 FY24. Jio had clocked a net profit of Rs 4,335 crore in Q1 FY23. The total income of Reliance Jio during the reported quarter rose to Rs 24,127 crore from Rs 21,995 crore a year ago.
Jio's revenue from operations increased by 9.9 per cent to Rs 24,042 crore during Q1 FY24 from Rs 21,873 crore in Q1 FY23.
Jio has been investing heavily in network infrastructure to grab a bigger market share. It launched a cheap 4G feature phone to tap into the country's vast remote markets, which are still on slower mobile networks, earlier this month.
Akash M Ambani, Chairman, Reliance Jio Infocomm Limited, said, “Jio continues to make rapid progress in rolling out its True5G network. Jio is on track to complete pan India 5G rollout before December 2023. The new JioBharat phone is another innovation by Jio combining network and device capabilities to help accelerate ‘2G-MUKT BHARAT’ vision and democratize internet. With these investments, Jio is embarking on a journey to accelerate growth momentum across connectivity and digital platforms over the coming years."
Also Read: Reliance Jio Q1 Result: Telco's Net Profit Jumps 12 Per Cent To Rs 4,863 Crore
Reliance Retail's Net Profit Up 18.8 Per Cent
Reliance Retail, the retail division of Reliance reported an 18.8 per cent year-on-year rise in net profit, amounting to Rs 2,448 crore for Q1 FY24. The company reported gross revenue of Rs 69,948 crore, a 19 per cent year-on-year increase from Rs 58,554 crore in Q1 FY23. The company said this growth was primarily driven by strong performances in the grocery, consumer electronics (excluding devices), and fashion & lifestyle segments.
The company said it received a record 249 million footfalls across formats and geographies in the quarter reflecting a growth of 42 per cent YoY. Reliance Retail expanded its physical store network with 555 new store openings, taking the total store count at the end of the quarter to 18,446.
On Reliance Retail, Isha M Ambani, Executive Director at Reliance Retail Ventures Limited, said “I am delighted to share that our financial performance in the quarter has been resilient and aligned with our business goals. The sustained growth across consumption baskets has further consolidated our position as a market leader. We continue to innovate and invest in our stores and digital platforms to make shopping more engaging for our customers."
Oil And Gas Segment Revenues Jumps 27.8 Per Cent
In Q1 FY24, RIL's Oil to Gas segment revenue reached Rs. 4,632 crore ($565 million), an increase of 27.8 per cent compared to Q1 FY23. The EBITDA increased by 27 per cent, reaching Rs 4,015 crore, primarily due to the rise in gas production from the KG-D6 block. The block is currently producing approximately 27 million standard cubic meters per day (mmscmd), up from 19 mmscmd in the previous quarter, and is expected to reach 30 mmscmd in the near future. The company's net debt stands at Rs 1.26 lakh crore.