Monday, 6 February, 2023

Weak Petrochemicals Business

Reliance witnesses downsized profits

MUMBAI: Indian oil-to-telecoms giant Reliance Industries reported mixed quarterly results Friday, with weakness in its core oil-refining business hurting profits even as its retail and telecom arms posted strong earnings.

The conglomerate, which is owned by Asia's second-richest man Mukesh Ambani, reported a net profit of 157.9 billion rupees ($1.9 billion) between October and December, nearly 15 percent lower than in the same period last year, reports AFP.

Revenue from operations at India's largest company by market capitalisation rose 15 percent year on year, to 2.2 trillion rupees, helped by strong contributions from Reliance's newer consumer-facing businesses.

Reliance's board also approved a plan to issue bonds to raise up to 200 billion rupees to fuel further expansion across its diversified businesses.

Revenues from Reliance's oil-to-chemicals (O2C) business -- which accounts for 65 percent of total income -- rose only 10 percent year on year to 1.4 trillion rupees, hurt by planned plant maintenance work and weak global demand.

Demand for polyesters was hurt by "slow downstream demand in China due to COVID lockdown and bearish global macroeconomic scenario", the company said, adding that India's wedding season and a shift in China's zero-Covid policy had improved the outlook for the current quarter.

Revenues from the energy giant's smaller oil and gas exploration and production business rose nearly 75 percent year on year, to 44.7 billion rupees, helped by higher gas prices.

Telecom arm Reliance Jio saw gross revenues rise 20.8 percent on-year, to 292 billion rupees, as it added 5.3 million net subscribers in the quarter.

The company said more than 114 million people watched the recent football World Cup -- for which Jio bagged exclusive streaming rights in India -- on its JioCinema app, with 34 million viewing the final.

"Jio delivered record revenues and EBITDA driven by strong momentum in customer growth and data consumption," chairman and managing director Ambani said in a statement.

Its 5G service was now available in 134 towns and cities in India, he said, after last year pledging to spend $25 billion on 5G networks in the country, aiming to strengthen his grip on one of the world's fastest-growing smartphone markets.

Gross revenues from Reliance's retail business jumped 17.2 percent on-year to a record high of 676 billion rupees.

The company reported its highest-ever footfall of 201 million, boosted by 789 new store openings in the quarter.

Reliance's multibillion-dollar operations have been powered by oil and petrochemicals businesses, but the company has diversified into new areas including telecom and retail in recent years.

The company's shares closed 1.15 percent lower in Mumbai ahead of the earnings announcement on Friday.