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Reliance Industries Ltd. (RIL) has reported $17.8 billion in revenue for its oil to chemicals segment for the quarter ended September 30, down 7.3 percent year-on-year on lower oil prices.
The diversified Indian conglomerate said crude prices fell 14 percent during the second quarter of company financial year 2024 (2Q FY2024), or the July–September 2023 calendar period, against the same quarter a year ago. The weaker petroleum prices resulted in lower realization for finished products.
“Crude oil benchmarks declined Y-o-Y [year-on-year] due to macro-economic headwinds on high interest rates, lower industrial activities, and sentiments shifting from risk premium to fundamentals”, the Mumbai-based group said in a press release.
“Continued Russian oil supply despite EU [European Union] ban pressured prices. Dated Brent averaged $86.8 /bbl [per barrel] in 2Q FY24, lower by $14.1 /bbl Y-o-Y”.
However, Reliance logged a 36 percent year-over-year rise in earnings before deductions for 2Q FY2024 to $2 billion due to “strength in gasoline and PVC margins, optimized feedstock sourcing and lower SAED [supplemental amortization equalization disbursement] in-line with decline in middle-distillate cracks”, the quarterly announcement on its website said.
While Reliance raised throughput to 20 million metric tons (MMt) from 19.7 MMt in the previous quarter, it cut production meant for sale by 100,000 metric tons to 17.1 MMt.
The decline in sales volume was consistent with the quarter-on-quarter decrease in national consumption of petroleum products, based on data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum and Natural Gas. India consumed 18.26 MMt of oil products September, mostly high speed diesel (6.49 MMt), according to the latest data on the PPAC website.
Production grew 5.6 percent year-on-year despite maintenance shutdowns at several units in the second half of September, according to the earnings report.
“Resilient performance of the O2C [oil to chemicals] segment despite volatility in energy markets was led by strong growth in fuel demand in a supply-constrained market”, Reliance chair and managing director Mukesh D. Ambani said in the report.
For its upstream oil and gas business Reliance recorded a 71.8 percent year-on-year increase in quarterly revenue to $797 million.
The surge in exploration and production revenue was “mainly on account of higher production of Gas & Oil and commencement of Condensate production from MJ field along with 6 percent higher gas price realization in KG D6”, the news release said.
On June 30 Reliance and partner BP PLC announced the start of production in the MJ field, which they said is ” the last of three major new deepwater developments the RIL-bp consortium have brought into production in block KG D6 off the east coast of India”.
The other two fields, R-Cluster and Satellite Cluster, came onstream December 2020 and April 2021 respectively, according to the partners. Together the three can produce about one billion cubic feet of gas per day. “This is expected to account for around one-third of India’s current domestic gas production and meet approximately 15 percent of India’s demand”, they said in the June announcement.
Upstream earnings before deductions soared 50.3 percent year-on-year to $574 million for 2Q FY2024.
Reliance expects additional production from 40 wells in 4Q FY2024.
Across its operations, which also include polymers, textiles, diversified retail and digital services, Reliance collected $2.4 billion in net income for 2Q FY2024, up 29.7 percent year-on-year. Gross revenue totaled $30.8 billion.
Reliance had INR 4.4 trillion ($52.82 billion) in current assets as of September 30, 2023, including INR 688.27 billion ($82.62 billion) in cash and cash equivalents. Its current liabilities meanwhile stood at INR3.78 trillion ($4.54 trillion).
For the first half of its current financial year, Reliance distributed INR 60.89 billion ($70.95 million) in dividends.
To contact the author, email jov.onsat@rigzone.com
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