- Image 1 of 2
- Image 2 of 2
MUMBAI, Maharashtra (AFP) – Reliance Industries, India's largest private firm, on Friday reported a 19 percent rise in quarterly net profit, beating estimates as better margins from refining offset lower natural gas output.
The energy giant, controlled by India's wealthiest man Mukesh Ambani, said consolidated net profit rose 18.9 percent to 53.52 billion rupees ($896 million) in the three months ended June, from 45.03 billion rupees a year ago.
"Reliance achieved strong results during the first quarter, while investing in projects that will provide sustainable advantage for a longer period," Ambani said in a statement.
The earnings beat analysts' expectations of a 52.7 billion rupee profit.
Reliance's gross refining margins (GRMs) for the first quarter rose 10.5 percent to $8.4 a barrel from $7.6 a year earlier.
Turnover however fell 4.6 percent to 905.8 billion rupees.
Analysts have been concerned in recent months about Reliance's ability to boost gas production from its oil blocks off India's east coast.
Crude oil production from Reliance's main oil field KG-D6 fell 41 percent year-on-year to just 0.5 million barrels of crude oil, a company statement said.
Natural gas production slid 53 percent to 49.2 billion cubic feet (BCF), over levels a year earlier.
In 2011, British energy giant BP paid $7.2 billion to acquire a 30 percent stake in 21 of Reliance's oil and gas fields.
Reliance hopes that BP's deepwater drilling expertise will give the Indian giant the skills to develop hard-to-exploit reserves and find more oil.
Reliance operates the world's largest oil-processing complex in Jamnagar, where two adjacent refineries have a combined capacity to process 1.24 million barrels of oil a day.
Reliance has built up a war chest for acquisitions, with cash reserves of more than 930.66 billion rupees ($15.6 billion) as of the June-end quarter.
The energy behemoth has been scouting for acquisitions and looking to diversify its revenue sources by expanding into financial services, retailing, hotels and communications.
The company said revenues for its retail business rose 53 percent to 34.74 billion rupees. It now operates more than 1,500 stores in 134 cities across the country.
Ambani has also announced a foray into the Indian media sector as well as telecom.
Last month, Mukesh and younger brother Anil, who fought a very public feud for spoils of their father's business empire, announced a $2.1-billion deal to share telecom tower infrastructure, cementing a reconciliation between the once-warring siblings.
Reliance Jio Infocomm, the telecom unit of Mukesh Ambani-led Reliance Industries, signed the agreement with Reliance Communications, the flagship firm of the Anil Ambani group, to share the latter's telecom tower equipment.