Reliance Industries posts record Q3 profits

The company’s petrochemicals segment reported the biggest drop in earnings before interest and tax in at least 17 quarters

Mukesh Ambani, chairman and managing director of Reliance Industries Limited.
Mukesh Ambani, chairman and managing director of Reliance Industries Limited.

India’s oil-to-telecom conglomerate Reliance Industries (RIL) posted its highest ever profit of $1.6bn in the third quarter, buoyed by its booming petrochemical business, higher crude prices and double-digit growth at its consumer businesses.

Its gross refining margin (GRM), however, fell sharply to $8.8 a barrel, compared to $11.6 in the same quarter the year before.

The company’s petrochemicals segment, however, reported the biggest drop in earnings before interest and tax in at least 17 quarters. Higher raw material costs, coupled with demand uncertainty and supply glut, caused the key product margin to drop to its lowest in a decade.

The company's petrochemical, refining, oil and gas-related operations form the core of its business; other divisions of the company include cloth, retail business, telecommunications and special economic zone (SEZ) development.

RIL’s proposed deal to sell a 20% stake in its oil-to-chemicals business to Saudi Aramco for an estimated $15bn will miss its planned 31 March timeline, a senior company executive told reporters.

Oil industry analysts said the delay in reaching a binding agreement between Saudi Aramco and RIL could be because of the complex nature of the latter’s oil business assets and their contractual obligations and the on-going legal disputes with the Indian government.

ADNOC, in December 2019, signed a framework agreement with RIL to explore development of an ethylene dichloride (EDC) facility in Ruwais.

Under the terms of the agreement, ADNOC and RIL will evaluate the potential creation of a facility that manufactures EDC adjacent to ADNOC's integrated refining and petrochemical site in Ruwais and strengthen the companies' existing relationship supporting future collaboration in petrochemicals.

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