Google profit

RIL Q4 consolidated net profit up 22.5%; FY22 revenue at Rs 7 trillion

Reliance Industries (RIL), headed by Mukesh Ambani, on Friday reported consolidated net profit of Rs 16,203 crore for the quarter ended March 31, 2022 (Q4 FY22), up 22.5% from Rs 13,227 crore rupees a year ago, but slightly below expectations.

A poll of analysts by Bloomberg had pegged the net profit at Rs 16,819 crore for the fourth quarter.

But for the windfall revenue of Rs 2,836 crore in the December 2021 quarter, net profit would have been its highest ever quarterly profit. Revenues and Ebitda for the quarter were the highest on record. Similarly, revenue, Ebitda and net profit for FY22 were RIL’s highest annual figures ever.

The oil-telecom conglomerate’s consolidated operating revenue jumped 38.6% year-on-year (YoY) to 2.07 trillion rupees for the reported quarter, matching street estimates, according to Bloomberg.

The company’s board has also recommended a dividend of Rs 8 per share for the financial year ending March 31, 2022 (FY22).

For FY22, the company reported net revenue (excluding goods and services tax and excise duty) of Rs 6.99962 crore (Rs 7 trillion) or $91 billion (at 76.915 for one USD). Consolidated net profit (attributable to company owners) was Rs 60,705 crore for FY22.

“Despite the continued challenges of the pandemic and heightened geopolitical uncertainties, Reliance delivered a strong performance in FY22,” said RIL Chairman and CEO Mukesh Ambani.

On Friday, before the results, the RIL certificate closed down 0.74% on BSE, at Rs 2,621.15 per share.

The index heavyweight stock has risen almost 36% over the past year and recently saw its market capitalization cross 19 trillion rupees. It is also the first Indian company to cross the $250 billion mark in market capitalization.

RIL’s strong revenue growth in the fourth quarter was driven by the petroleum-chemicals (O2C) business, which recorded a 44.2% year-on-year growth to 1.46 trillion rupees, followed by by retail, whose revenue jumped 23.1% to 50,834 rupees. crore during the reporting period.

The strong revenue performance was reflected in the company’s overall operating results as well as consolidated operating profit, which jumped 27.7% year-on-year to Rs 33,968 crore in the fourth trimester.

From petroleum to chemicals

Growth in the O2C business was driven by refining operations where the increase in global gross refining margins (GRMs) during the quarter supported business performance. O2C includes refining, petrochemicals and fuel retailing activities. It remains a key vertical for RIL, contributing over 60% of revenue and 43% of operating profit.

The overall surge in global crude oil prices drove much of the 44% sales growth in the segment during the quarter, analysts said, which was supported by volume growth of 4.2% thanks to to a steady recovery in demand.

O2C segment’s operating profit rose nearly 25% in the fourth quarter from a year ago to Rs 14,241 crore, driven by cracks or high transportation fuel products (such as diesel , gasoline and aviation turbine fuel), which was partially offset by lower polymer and intermediate margins and higher energy cost.

Operating margin for the quarter in the O2C segment decreased 150 basis points year-on-year to 9.8%. “This was primarily due to the base effect driven by higher commodity and product prices,” the company said.

Jio Platforms

RIL’s digital services arm continued its strong performance, led by the telecommunications sector, which recorded a 21.8% year-on-year increase in revenue and a 22.9% year-on-year increase in net profit. The digital segment’s earnings before interest, amortization and taxes rose 27.4% year-on-year to Rs 10,918 crore and contributed one-third of the quarter’s consolidated operating profit.

Retail business

Organized retail saw resilient performance in the reported quarter despite the threat of the spread of the Omicron variant of Covid-19 earlier in the quarter, the company said.

petroleum gas

The recovery of the company’s oil and gas activities (production and exploration) continued, supported by a favorable environment given the surge in international prices for natural gas and crude oil, and the increase in volumes.

Segment revenue rose 137% year-on-year to Rs 2,008 crore, while operating profit more than tripled to Rs 1,556 crore from Rs 480 crore a year ago.

Gas production from the KGD6 fields in the fourth quarter was 37.7 billion cubic feet (RIL share) compared to 15 billion cubic feet in the year-ago quarter.

RIL’s average realization for its natural gas rose to $6.1 per mmBtu (million metric British thermal units) in the quarter from $3.99 per mmBtu a year ago.