RIL Q1 results: Profit and revenue beat estimates, Jio reports Rs 891 crore profit, increase of 6.1 percent on sequential basis

Mumbai: Reliance Industries, the country’s largest company by market cap, today reported consolidated profit at Rs 10,104 crore in Q1, down sequentially by a marginal 2.5 percent, but far ahead of analyst estimates.

Profit for the quarter was expected at Rs 9,852 crore, according to a CNBC-TV18 poll.

Consolidated revenue grew by 13.2 percent quarter-on-quarter to Rs 1,56,976 crore, which was higher than the CNBC-TV18 poll estimate of Rs 1.43 lakh crore, driven by refining, digital and retail businesses.

The year-on-year increase in consolidated profit was 6.8 percent and for revenue was 22 percent.

“First quarter earnings were strong despite weak global macroeconomic environment and challenging hydrocarbon market conditions,” Mukesh D. Ambani, Chairman and Managing Director said.

“Downstream businesses delivered resilient performance in an environment of slower demand growth and incremental supplies. The performance reflects the benefits of deep refining and petrochemicals integration, chain economics and feedstock flexibility,” he added.

Earnings on most parameters beat analyst estimates, barring gross refining margin, which came in at $8.10 a barrel for the quarter (the lowest level since Q3FY15) against street expectations of around $8.50 a barrel.

RIL said it maintained significant premium over Singapore complex margins due to product yield optimisation and robust risk management.

The GRM stood at $8.2 a barrel in Q4FY19 (outperforming Singapore complex margins by $4.6 a barrel) and $10.5 a barrel in Q1FY19.

Refining business, which contributed 64 percent to total revenue, increased by 15.8 percent sequentially to Rs 1.01 lakh crore driven by higher volumes with 3.8 percent QoQ growth in its operating income, but margin contracted 59 bps.

At the operating level, consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 2.3 percent quarter-on-quarter to Rs 21,315 crore but margin contracted 142bps to 13.6 percent in Q1. EBITDA was expected at Rs 20,894 crore by a CNBC-TV18 poll estimates.

The year-on-year increase in EBITDA was 3.16 percent and the margin in June quarter last year was 16.05 percent.

Reliance reported a 11.3 percent quarter-on-quarter degrowth in its petrochemical business at Rs 37,611 crore for the quarter with operating income falling 5.9 percent, but margin expanded 130bps on sequential basis.

“Revenue from the petrochemicals segment decreased by 6.6 percent YoY due to decrease in volumes and price realisations primarily in paraxylene (PX) and monoethylene glycol (MEG) which was partially offset by increase in volumes of polyesters,” RIL said.

On telecom front, Reliance Jio registered a healthy growth with profit growing 6.1 percent sequentially to Rs 891 crore, with subscriber base at 33.13 crore in Q1 against analyst expectations of 30.67 crore.

The subscriber base was 33.25 crore in quarter ended March 2019.

Jio revenue grew by 5.2 percent quarter-on-quarter to Rs 11,679 crore in Q1, with operating income showing a 8.2 percent sequential growth and margin expansion of 110bps.

“The company continues to make major strides in its retail and digital services businesses led by focus on growth markets with offerings in the right product segments and compelling value proposition. Our digital services business continues to transform the mobility market in India while scaling newer milestones,” Ambani said.

Reliance Retail has registered a 4.2 percent sequential growth at Rs 38,196 crore with its EBITDA rising 6.5 percent and margin expansion of 12 bps QoQ.

Reliance Industries said its outstanding debt as of June 2019 was Rs 2,88,243 crore compared to Rs 2,87,505 crore as of March 2019.

In addition, Reliance Industrial Investments and Holdings Limited (RIIHL), a wholly-owned subsidiary of Reliance Industries has entered into an agreement today with BIF IV Jarvis India Pte Limited, an affiliate of Brookfield Asset Management.

As per agreement, Brookfield will invest Rs 25,215 crore in the units proposed to be issued by the Tower Infrastructure Trust.

RIIHL is the sponsor of the Trust and the Trust currently holds 51 percent stake in Reliance Jio Infratel Private Limited to which the tower assets undertaking of Reliance Jio Infocomm was transferred as a going concern.

Reliance said proceeds from the investment by Brookfield will be used to repay certain existing financial liabilities of Reliance Jio Infratel and acquiring the balance 49 percent of equity share capital of Reliance Jio Infratel, currently held by RIL.