RIL records 14% increase in third quarter earnings
Mumbai Trusted industries ( RIL ) reported a 13.5% increase in profits in the third quarter of fiscal year 2020 to Rs 11,640 million rupees, benefiting from higher price realizations in their refining, retail, media and digital services businesses. However, the company's revenues in the December quarter fell 1.4% to Rs 1.68 lakh crore due to an 11% decrease in its traditional petrochemical and refining businesses and a 7% drop in the price of Brent crude.
Operating profit in petrochemicals, the biggest contributor to RIL’s earnings, declined 29% to Rs 5,880 crore due to inventory overhang and global demand slowdown. On the other hand, refining, the second-largest contributor to RIL's profit, increased 12% to Rs 5,657 crore because of better margins. RIL’s Jamnagar Refinery , the world's largest, earned $ 9.2 for every barrel of crude oil it processed, more than $ 8.8 it earned in the third quarter of fiscal year 2019. Retail, media and digital services ( Jio Unit ) expanded 58%, 309% and 63% to Rs 2,389 million, Rs 237 million and Rs 3,887 million, respectively.
RIL chairman Mukesh Ambani said the results of the energy business reflects the weak global economic environment and volatility in the energy market. “Within our oil to chemicals chain, downstream petrochemicals profitability was impacted by weak margins across products with subdued demand in well-supplied markets. While refining’s performance improved given our focus on cost positions, high operating rates and product placement. ”I added that RIL’s consumer businesses continue to establish new milestones every quarter.
Ambani had said that he wants the retail and digital services businesses to contribute as much to RIL’s earnings as that of its traditional units like petrochemicals and refining. The retail and Jio divisions accounted for 37% of RIL’s operating profit in the December quarter of fiscal 2020, up from 26% a year earlier. The company said the consumer business is on track to be equal to the operating profit of the hydrocarbon business.
The solid productivity of the store and the wide range of products increased the retailer's income. Growth to Trusted retail sale , the largest network of stores, profits and profits in the country, was driven by the consumer electronics, fashion and lifestyle and supermarket segments. Dependence Jio, which added 15 million subscribers in the third quarter of fiscal year 2020 with its attractive telephone and rate plans, reported a profit of Rs 1,350 million in an operating income of Rs 13,968 million.
RIL’s debt increased 7% to Rs 3.06 lakh crore in the third quarter of fiscal 2020 while cash on its book stood at Rs 1.53 lakh crore.