RIL net profit increases 6.0%

"Notwithstanding these challenges, Reliance has delivered reasonably robust results with high operating leverage. Our focus remains on enhancing shareholder value by leveraging an exceptionally strong balance sheet, operating top decile assets and investing prudently in future growth engines."

FINANCIAL PERFORMANCE REVIEW AND ANALYSIS

RIL achieved a turnover for the nine months ended 31st December 2011 of ` 251,958 crore ($ 47.5 billion), an increase of 37.4% on a year-on-year basis.

Increase in volumes accounted for 3.9% growth in revenue and higher prices accounted for 33.5% growth in revenue.

Exports were higher by 55.2% at ` 156,753 crore ($ 29.5 billion) as against ` 100,995 crore in 9M FY10-11.

Higher crude prices resulted in consumption of raw materials increasing by 50.6% to ` 203,294 crore ($ 38.3 billion) on a year-on-year basis.

Employee costs were at ` 2,265 crore ($ 427 million) for the nine months ended 31st December 2011 as against ` 1,938 crore.

Other expenditure increased by 13.0 % from ` 11,594 crore to ` 13,106 crore ($ 2.5 billion) due to higher power & fuel expenses and exchange differences.

Operating profit before other income and depreciation declined by 4.3% from ` 28,283 crore to `27,055 crore ($ 5.1 billion).

Net operating margin was lower at 10.7% as compared to 15.4% in the corresponding period of the previous year due to base effect and reduction in higher margin E&P operating profit arising out of lower production and due to transfer of 30% Participating Interest (PI) in KG-D6 to BP.

Other income was higher at ` 3,897 crore ($ 734 million) as against ` 2,135 crore on a year-on-year basis primarily due to higher average holdings as well as higher yield on investments.

Depreciation (including depletion and amortization) was lower by 14.5% at ` 8,734 crore ($ 1.6 billion) against ` 10,221 crore in 9M FY 2010-11 due to lower depletion charge in oil & gas as a consequence of the transfer of 30% PI in 21 blocks to BP.

Interest cost was higher at ` 1,899 crore ($ 358 million) as against ` 1,632 crore in 9M FY 2010-11 principally due to higher foreign exchange difference. This resulted in gross interest cost being higher at ` 2,286 crore ($ 430 million) as against ` 1,986 crore in 9M FY 2010-11.

Interest capitalized was higher at ` 387 crore ($ 73 million) as against ` 354 crore.

Profit after tax was ` 15,804 crore ($ 3.0 billion) as against ` 14,910 crore for the corresponding period of the previous year.

Basic earnings per share (EPS) for the nine months ended 31st December 2011 was ` 48.3 ($ 0.9) against ` 45.6 for the corresponding period of the previous year.

Outstanding debt as on 31st December 2011 was ` 74,503 crore ($ 14.0 billion) compared to ` 67,397 crore as on 31st March 2011.

The Company is debt free on a net basis as compared with gearing of 13.5% as on 31st March 2011.

RIL had cash and cash equivalents of ` 74,539 crore ($ 14.0 billion). These were primarily in fixed deposits, certificate of deposits with banks, mutual funds and Government securities / bonds.

Cash outflow on account of capital expenditure for the nine months amounted to ` 4,836 crore ($ 911 million). The net capital expenditure for the nine months ended 31st December 2011 was `12,458 crore ($ 2.3 billion) including ` 8,816 crore on account of exchange difference on long term loans.