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RIL Q1 PAT slips 7% YoY to Rs 12,273 cr
(26 Jul 2021)
Profit before tax jumped nearly 28% to Rs 17,270 crore in Q1 FY22 over Q1 FY21. The company's consolidated EBITDA stood at Rs 27,550 crore in Q1 FY22, rising 27.6% year on year.

On a sequential basis, RIL's net profit declined 8% while net sales fell 6.44% in Q1 FY22 over Q4 FY21.

Commenting on the results, Mukesh Ambani, chairman and MD of Reliance Industries said, “I am happy that our company has delivered robust growth despite facing a highly challenging operating environment caused by the second wave of the COVID pandemic. The results of the first quarter of FY2022 clearly demonstrate the resilience of Reliance's diversified portfolio of businesses that cater to large parts of the consumption basket. In our O2C business, we generated strong earnings through our integrated portfolio and superior product placement capabilities. Along with our partner bp, we commissioned the satellite cluster in KG D6 and continued to ramp up production, contributing to 20% of gas production in India. This will be a major contribution to our country's energy security. Jio has posted yet another record quarterly performance with industry leading operating metrics. I am thankful to Jio's family of loyal subscribers whose number has grown further during the quarter, consolidating its position as India's No. 1 provider of digital connectivity and services. They appreciate our continuing focus on raising the bar for superior service quality. COVID-related restrictions on store operations during the quarter impacted our Retail business operations and profitability. This is a temporary phenomenon. We remained focused on ensuring supplies of necessities, including food, grocery, health & hygiene products through a combination of online-offline channels. We stepped up our efforts in creating partnerships with small merchants and digital engagement with consumers. This is creating a newer and inclusive model of growth. I am confident that the retail business is poised to create exponential value and growth.'

The telecom arm of RIL, Reliance Jio, witnessed a 44.9% year-on-year (YoY) growth in the net profit at Rs 3,651 crore in Q1 FY22 over Q1 FY21. The consolidated revenue from operations grew by 9.8% to Rs 22,267 crore in Q1 FY22 over Q1 FY21. Jio posted a total average revenue per customer (ARPU) during the quarter of Rs 138.40 per subscriber per month while customer base as on 30 June 2021 stood at 440.6 million with a net addition of 42.3 million customers year on year. Jio's EBITDA rose 21.3% to Rs 8,892 crore Q1 FY22 over Q1 FY21. EBITDA margin improved by 440 basis points to 46.9% in Q1 FY22 from 42.5% in Q1 FY21, reflecting operational efficiency.

For Reliance Retail, net profit for the quarter was Rs 962 crore higher by 123% year on year. Gross Revenue stood at Rs 38,547 crore, rising by 21.9% year on year. EBITDA came at Rs 1,941 crore, up by 79.9% year on year. EBITDA margin improved to 5.8% in Q1 FY22 from 3.8% in Q1 FY21 but deteriorated from 8.8% registered in Q4 FY21.

Reliance Retail's store expansion was constrained during the quarter as the business opened 123 stores taking the total count to 12,803. RIL said that another 700 plus stores in the pipeline will be commissioned as curbs are lifted. The company further added that the focus on scaling up digital commerce and merchant partnerships helped partially alleviate the loss of business due to store closures as these streams contributed a sizable 20% of retail sales in the quarter.

On the operational front, Reliance Retail said the operating environment was challenging through the quarter as restrictions were enforced across several States due to the second wave of COVID-19 impacting operations, supply chain and mobility. Store operations were disrupted through the quarter starting from mid of April. After second week of June, there were sporadic signs of easing with continued restrictions varying across geographies. Operating efficiency was impacted due to the restrictions across the network as stores were operating for 70%, 25%, 38% of normal working hours during April, May and June respectively. Retail stores and digital commerce could sell only essentials for the most part of the quarter.

In the oil to chemicals (O2C) segment, segment revenues for Q1 FY22 increased by 75.2% year on year to Rs 103,212 crore ($ 13.9 billion) primarily on account of sharp increase in product prices on the back of higher crude prices. Segment EBITDA for Q1 FY22 improved by 49.8% year on year to Rs 12,231 crore primarily on account of rebound in transportation fuel cracks to 4-6 quarter highs. The segment's revenue increased by 75.2% year on year to Rs 103,212 crore in Q1 FY22 over Q1 FY21. Operational flexibility and responsiveness to market dynamics continue to play a significant role in Reliance's O2C performance. Total throughput increased from 17.8 MMT to 19.0 MMT on Y-o-Y basis. Cracker operating rates was at 95%, marginally lower on scheduled shutdown of ROGC. RIL said downstream margins continued to remain strong with product deltas near or above 5-year averages. Favorable light-feed cracking environment and increased domestic gas availability helped O2C optimize its costs. O2C maintained its market share in domestic markets. In addition, O2C continues to strategically place its products in export markets.

In the oil and gas (exploration & production) business, segment revenue for Q1 FY22 increased by 153.2% year on year to Rs 1,281 crore. EBITDA for the quarter increased sharply to Rs 797 crore ($ 107 million). This was primarily due to smooth ramp up of gas production from R-Cluster and commencement of production from SatCluster field in KG D6 block. Price realization for CBM gas for the Quarter was higher by 16% at $ 6.01/mmbtu (GCV). Realizations in the US Shale business improved to $ 4.95/MCFe on the back of higher gas and condensate prices.

In the media business, revenue from operations rose 50% year on year to Rs 1,214 crore during Q1 FY22. EBITDA jumped up six times year on year to Rs 188 crore. Operating margin clocked at 15.5%, was the highest ever in first quarter, despite second wave impact. Viewership share of TV entertainment rose further to 11%, up sharply from a low of 9.2% in Q1 FY21. On the back of a full roster of compelling content, the portfolio was able to re-scale adrevenue to the same levels as in 1Q FY20. News advertising remained resilient despite the second wave, led by a rise in news consumption and digital events replacing physical ones.

Shares of RIL were trading 0.44% lower at Rs 2,096 on BSE.

RIL is the largest private sector corporation in India. Its activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and digital services.

   
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