Reliance Industries Ltd’s (RIL) fourth quarter (Q4) consolidated profit rose nearly 16% to Rs 7,398 crore ($1.1 billion), the highest record in more than eight years, due to strong margins in its refining and petrochemicals business.
The company's refineries earned $10.8 on each barrel of crude processed as against $10 a year earlier. RIL's earnings beat analyst estimates of Rs 7,010 crore, according to Bloomberg.
RIL's Q4FY16 revenues declined nearly 9% to Rs 64,569 crore ($9.7 billion) as the benchmark (Brent crude) oil prices declined 41% in the last one year. Exports fell about 18% to Rs 30,935 crore due to lower product prices.
The revenues from the company's mainstay - refining and marketing - decreased 15% to Rs 48,064 crore, but gross profit from this segment increased 30% to Rs 6,394 crore. This segment accounted for 74% of RIL's revenue and 67% of its gross profit in the quarter ended March 2016.
Petrochemicals, the second biggest contributor to revenues, declined 4% to Rs 20,915 crore in the fourth quarter from a year earlier but gross profit increased 35% to Rs 2,713 crore. This segment accounted for 32% of the company's revenue and 28% of its gross profit in the three months ended March 2016.
For fiscal 2016, RIL's consolidated profit climbed 17% to Rs 27,630 crore while revenue rose 24% to Rs 296,091 crore. Gross profit from refining increased 49% to Rs 23,598 crore and that of petrochemicals enhanced 23% to Rs 10,221 crore.
"FY16 has been a year of outstanding achievement for our downstream hydrocarbon businesses. Our refineries sustained double-digit gross refining margins and record levels of utilization through the year. Our balanced petrochemical portfolio, across products and feedstocks, helped capture the benefit of vastly improved naphtha cracking economics and favourable polymer markets," said Mukesh Ambani, CMD, RIL, in a statement.
Higher profits will help the company complete its expansion projects in its petrochemicals and refining business at Jamnagar, Dahej and Hazira and start its mobile service operations. Ambani said RIL's telecom subsidiary Reliance Jio Infocomm will commercially roll out its 4G services this year with spending of Rs 1.2 lakh crore, including on spectrum, and will spend another Rs 30,000 crore.