Reliance reported a net profit of Rs 60,705 crore on sales of Rs 7.92 lakh crore (USD 102 billion).
New Delhi:
Billionaire Mukesh Ambani’s Reliance Industries Ltd Friday reported a 22.5 percent increase in net profit for the quarter ended March thanks to huge oil refining margins, steady growth in telecom and digital services and strong retail momentum.
The oil-to-retail-to-telecom conglomerate’s consolidated net profit rose to Rs 16,203 crore in the quarter ended March 31, 2022 from Rs 13,227 crore, the company said in a statement.
However, net profit fell 12.6 percent sequentially, breaking a six-quarter chain of quarter-over-quarter improvement.
Reliance’s revenues also increased due to an increase in broadband subscribers, an increase in online retail and new energy investments.
The country’s largest company’s consolidated revenue by market value increased 35 percent year-on-year to Rs 2.32 lakh crore in the fourth quarter of FY22.
For the full fiscal year 2021-2022 (April 2021 to March 2022), Reliance reported a net profit of Rs 60,705 crore on sales of Rs 7.92 lakh crore (USD 102 billion).
It is the first Indian company with a turnover of 100 billion dollars in a year.
The company reported its highest-ever quarterly EBITDA (earnings before interest, taxes, depreciation and amortization) of Rs 33,968 crore, up 28 percent year-on-year.
The EBITDA of the O2C (oil-to-chemicals) business increased by 25 percent to Rs 14,241 crore, while the pre-tax profit of the digital services of Rs 11,209 crore was 25 percent more than last year.
Retail EBITDA rose 2.5 percent to Rs 3,712 crore and gas production from satellite fields in the KG-D6 block boosted oil and gas EBITDA three-fold to Rs 1,556 crore.
Consumer activities now account for nearly 45 percent of the segment’s EBITDA.
The conflict between Russia and Ukraine accelerated an already tight supply and demand situation for crude oil petroleum products, leading to higher cracks or margins on petrol and diesel.
Despite a decline in subscriber numbers in the past two quarters due to subscriber inactivity clearing/SIM consolidation, increased revenue per user (ARPU) and debt refinancing boosted Jio’s net profit — the telecom and digital branch — by about 24 percent to Rs 4,173 crore in January-March.
For the fiscal year ended March 31, 2022, Reliance Jio’s consolidated net profit increased by about 23 percent to Rs 14,854 crore.
Retail went from strength to strength thanks to multiple additional acquisitions, continued investments in building complementary offline-to-online infrastructure and recovery in momentum after Covid.
The company has invested more than USD 1 billion in acquiring assets and building capabilities from Reliance Retail and has opened more stores in tier 2 and 3 cities.
The progress made in green energy Giga plants and the revitalized upstream segment after a lukewarm 4-5 years provide a recipe for strong growth in the next 24-36 months.
The performance of the oil-to-chemicals business was dampened by weak margins in the petrochemicals division due to higher crude oil prices and declining international margins for key products.
But the company, which declared itself net debt-free during the pandemic, saw its loans exceed cash in the fourth quarter of the current fiscal year. Refinancing commitments related to telecom spectrum saw gross debt of Rs 2,66,305 crore higher than cash balance of Rs 2,31,490 crore.
Reliance operates four business verticals — O2C operations include its oil refineries, petrochemical plants and fuel retailing business; a retail with physical stores and e-commerce; digital services related to telecom arm Jio; and new energy business.
Reliance Retail Ventures Ltd’s EBITDA rose 2.4 percent to Rs 3,705 crore as demand improved across all categories. Retail net profit was 4.8 percent lower at Rs 2,139 crore in the quarter.
It opened 793 new stores during the quarter, bringing the total to 15,196.
O2C segment operating profit increased sequentially for the seventh straight quarter, helped by improved refining margins and prices.
Jio Platforms – the digital arm – reported a 23 percent increase in net profit of Rs 4,313 crore as the telecom segment’s average revenue per user (ARPU) rose to Rs 167.6 per month, up 21.3 percent.
It had a customer base of 410 million, down from 421 million in the previous quarter, primarily driven by SIM consolidation.
Commenting on the results, Mukesh D Ambani, Chairman and Chief Executive Officer of Reliance Industries Limited said: “Despite the ongoing challenges of the pandemic and increased geopolitical uncertainties, Reliance delivered a robust performance in FY2021-22.” While digital services and retail segments showed strong growth, the O2C business has proven its resilience and has shown a strong recovery despite the volatility in energy markets.
“Our relentless focus on customer satisfaction and service has resulted in increased engagement and traffic, leading to robust sales and profits in our consumer business.
“The gradual opening of economies coupled with continued high utilization rates in all locations and improvements in transportation fuel margins and volumes have boosted our O2C revenues,” said Mr Ambani.
Over the year, Reliance generated significant employment, with more than 2.1 lakh new employees in all companies.
“Our retail trade has exceeded the benchmark of 15,000 stores,” he said. “JioFiber is now the largest broadband provider in India within two years of its launch. Its oil and gas business now accounts for 20 percent of domestic gas production.” On the new energy front, he said the company is making progress with the development of its 5,000-hectare Giga factory complex in Jamnagar and is on track to reach its Net Carbon Zero target by 2035.
For the full fiscal year, the gross revenue of the consumer company was close to Rs 3 lakh crore while the EBITDA of the consumer company exceeded Rs 50,000 crore. Retail EBITA was over Rs 12,000 crore on sales of nearly Rs 2 lakh crore. The EBITDA for digital services was Rs 40,000 crore on sales of Rs 1 lakh crore.
O2C activities contributed 52 percent to incremental EBITDA in FY22. The O2C EBITDA of Rs 52,722 crore was up 38 percent year-over-year and was close to pre-COVID level.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)
