NE BUSINESS BUREAU
MUMBAII, OCT 30
Billionaire Mukesh Ambani’s Reliance Industries Ltd on Friday reported a 15 percent drop in the second-quarter net profit after a slump in core oil and chemicals business dragged down continued good showing in consumer-facing verticals such as telecom.
Net profit attributable to owners at Rs 9,567 crore in July-September compared with Rs 11,262 crore a year back, Reliance said.
The oil-to-telecom-to-retail conglomerate saw consumer-facing units doing well amid the lockdown easing but the core business continued to face pressure.
The firm’s net addition of 7.3 million subscribers and per-user revenue rising to Rs 145 helped the telecom business soar.
Digital services, which includes the telecom arm Jio, saw pre-tax profit surge 53 percent to Rs 8,345 crore as revenues soared by more than one-third.
With markets gradually opening up in the second quarter after a strict lockdown, revenue from the retail business was almost flat at Rs 39,199 crore and EBITDA was 14 percent lower at Rs 2,009 crore.
Petrochemicals revenue fell 23 percent to Rs 29,665 crore and pre-tax profit dropped 33 percent at Rs 5,964 crore.
Refining EBITA almost halved to Rs 3,002 crore as revenue slumped 36 percent.
The firm’s twin refineries earned USD 5.7 per barrel on turning every barrel of crude oil into fuel.
The profit in Q2 was lower sequentially as well as the April-June earning of Rs 13,248 crore included the one-time gain of Rs 7,629 crore from sale of 49 percent stake in petro retailing business to BP.
The company has sold a minority stake in the retail and telecom businesses to investors such as Silver Lake and KKR. It raised Rs 1.52 lakh crore from the sale of a stake in Jio Platforms and another Rs 37,710 crore from the sale of an 8.48 percent stake in its retail unit.
The firm had a gross debt of Rs 279,251 crore as of September 30, down from Rs 336,294 crore in the previous quarter. After considering Rs 185,711 crore of cash and Rs 30,210 crore received from stake sale deals that have closed and another Rs 73,586 crore pending from the strategic investors, the firm had a surplus of Rs 10,250 crore.
Commenting on the results, Reliance Industries Chairman and Managing Director Mukesh Ambani said, “We delivered strong overall operational and financial performance compared to the previous quarter with recovery in petrochemicals and retail segment and sustain growth in the digital services business.”
“Domestic demand has sharply recovered across our oil-to-chemical (O2C) business and is now near the pre-Covid level for most products. Retail business activity has normalised with strong growth in key consumption baskets as lockdown ease across the country,” he added.
With large capital raise in the last six months across Jio and retail business, several strategic and financial investors have joined the Reliance family, he said.
“We continue to pursue growth initiatives in each of our businesses with a focus on the India opportunity,” he further said.
Jio Q2 net profit jumps 3-fold to Rs 2,844 cr; revenue zooms 33 pc
Reliance Jio on Friday posted an almost three-fold jump in its net profit to Rs 2,844 crore for the September quarter, driven by ARPU uplift and strong customer addition, as it became the first operator outside China to surpass 400 million subscribers in a single market.
The company also said Abu Dhabi Investment Authority and The Public Investment Fund have purchased units of Fibre Trust worth over Rs 7,500 crore cumulatively (Rs 3,779 crore each).
Jio’s net profit jumped to Rs 2,844 crore for the second quarter ended September 30, 2020, from Rs 990 crore in the year-ago period. Revenue from operations surged 33 percent to Rs 17,481 crore during the just-ended quarter, according to a regulatory filing.
In an investor presentation, the company said the total customer base stood at 405.6 million in September 2020, making it the first operator outside China to surpass 400 million subscribers in a single country market.
The financial performance was “robust” despite COVID-related challenges and quarterly earnings before interest, tax, depreciation, and amortisation (EBITDA) run rate for Jio Platforms crossed USD 1 billion (over Rs 7,400 crore).
For Jio, net customer addition stood at 7.3 million.
The ARPU or earnings per subscriber – a key metric for the telecom companies – improved to Rs 145 in Q2FY21 from Rs 127.4 in the year-ago period, and about Rs 140 in the previous quarter.
“Blended ARPU (Average Revenue Per Subscriber) at Rs 145 was up 13.8 percent year-on-year with continued migration to higher tariff plans,” the presentation said.
For Jio Platforms, the net profit increased 20 percent quarter-on-quarter to Rs 3,020 crore in Q2FY21, from Rs 2,520 crore in the Q1FY21.
It may be recalled that Jio Platforms — that houses Jio and apps — had recently raised about Rs 1,52,056 crore from 13 investors, including Facebook, Google, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG, L Catterton, Public Investment Fund of Saudi Arabia, Intel Capital and Qualcomm Ventures, for a total 32.9 per cent stake.
On the completion of InvIT transactions, Reliance Jio said that Brookfield Infrastructure and its institutional partners completed an investment of Rs 25,215 crore for subscribing to units of the Tower Infrastructure Trust.
The investment provides strong sponsorship for the Trust, it added.
For Fibre InvIT, it said that RIIHL, a subsidiary of RIL, completed the recapitalisation of Digital Fibre Infrastructure Trust.
“Abu Dhabi Investment Authority and The Public Investment Fund have purchased units of Fibre Trust worth Rs 3,779 crore each,” it said.
Reliance Retail pre-tax profit falls 13.77 pc to Rs 2,009 cr
Reliance Retail on Friday reported a 13.77 percent fall in its pre-tax profit to Rs 2,009 crore for the second quarter ended September 30.
The retail arm of Reliance Industries Ltd (RIL) had posted a pre-tax profit, or Ebitda (earnings before interest, tax, depreciation, and amortisation), of Rs 2,330 crore in the July-September quarter a year ago.
Revenue from the organised retail segment of RIL during the quarter was at Rs 39,199 crore, down 13.77 percent as against Rs 41,223 crore in the corresponding period of the previous financial year.
The company has reported Rs 31,633 crore revenue from the organised retail segment in the April-June quarter this fiscal.
“Overall, Reliance Retail’s 2Q FY21 performance reflects resilience and customer preferences. The business is focused on restoring the momentum to pre-pandemic levels as operating curbs and limitations are relaxed,” said RIL in an earning statement.
Decisive actions taken by the business to adapt and strengthen its operating capabilities for the post-COVID-19 world position it well to maintain its consistent industry-leading performance, it added.
“Partially open and fully open stores were up to 85 percent in the second quarter of 2020-21. Footfalls, while recovering, are still lower than pre-COVID-19 levels, particularly across fashion and lifestyle and mall stores,” it said.
Reliance continued to expand its retail operation during the quarter and has a net addition of 125 stores in its network after the restrictions were lifted out.
“With operating curbs being lifted progressively, store expansion resumed with 232 stores being opened during the quarter, taking the current footprint of the business to 11,931 stores, spread over 29.7 million sq ft of retail space,” it said.
During the quarter, Reliance Retail entered the pharmaceutical category.
While its consumer electronics segment delivered a strong performance with revenues at 2x over the previous quarter, and notably double-digit growth over the previous year despite lower footfalls.
“Growth was broad-based across categories, with laptops and productivity devices more than doubling, and high-end TVs, air care and appliances delivering strong growth,” it said.
The company added that it moved swiftly to make an entire network of digital stores omni-enabled and this led to a significant uptick in orders over the last quarter.
While the fashion and lifestyle categories delivered strong sequential recovery with revenues up three times over the previous quarter, as more stores being allowed to operate during July-September.
Its growth momentum in grocery was sustained. This quarter saw the continued trend of lower footfall being more than offset by higher bill values.
“JioMart continues to scale up rapidly with a consistent increase in daily customer orders,” it said.
