India's Reliance Industries net profit goes up 1.5pc
Reliance Industries, India's largest private firm, on Monday said its quarterly net profit edged up 1.5 percent, matching estimates, as higher sales offset the impact of weak margins from refining operations.
The energy giant, controlled by India's wealthiest man Mukesh Ambani, said net profit for the second quarter ending September rose to 54.90 billion rupees ($900 million), from 54.09 billion rupees from a year earlier.
"Reliance's first half [April-September] performance reflects the resilience of our business model in a period of volatility and uncertainty," Ambani said in a statement.
Turnover rose 14 percent to 1.65 trillion rupees. The earnings met analysts' expectations of a 54.8 billion rupee profit.
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 1.0 million barrels of crude oil, a company statement said.
Natural gas production slid 52 percent to 94.6 billion cubic feet (BCF), over levels a year earlier.
Reliance has attributed the fall in production to "geological complexity and natural decline in the fields."
Last month, the government said that it is considering the appointment of global experts to investigate the decline in Reliance's gas output, which has been falling for three years.
Reliance's gross refining margins (GRMs) for the first quarter fell 19 percent to $7.7 a barrel from $9.5 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 905.40 billion rupees ($14.5 billion) as of the September-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 31 percent to 34.56 billion rupees. It now operates more than 1,550 stores in 136 cities across the country.
Ambani has also announced a foray into the Indian media sector as well as telecom.
In June, 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.