RTL Today – Conglomerate: India’s Reliance reports mixed results as taxes hurt oil trade
Indian conglomerate Reliance Industries posted mixed quarterly results on Friday, with weakness in its core oil refining business hurting profits, even as its retail and telecoms arms posted strong profits.
Reliance, which is owned by Asia’s second richest man, Mukesh Ambani, posted a net profit of 136.56 billion rupees ($1.65 billion) between July and September, 0.2% lower than at the same time last year.
Since the June quarter, net profit has declined by 24% to Rs 179.55 billion.
Operating revenue rose 33.7% year-on-year to Rs 2.33 trillion, helped by strong contributions from Reliance’s new consumer-facing businesses.
“I am pleased with the record performance of our consumer business which continues to achieve new milestones each quarter,” Chairman and CEO Ambani said in a statement.
But Reliance’s former oil-chemicals business was hit by “subdued demand” and “the introduction of special additional excise duties during the quarter”, it added.
On July 1, India imposed duties on the sale of gasoline, diesel and aviation fuel by oil refiners such as Reliance, in addition to a “one-off tax” on the sale of domestic crude .
Additional excise duties cost Reliance 40.4 billion rupees in the quarter, the company said, with planned plant closures further impacting refinery profits.
Reliance’s retail gross revenue jumped 42.9% year-on-year to a record high of 649.2 billion rupees.
An increase in footfall, the waning impact of the pandemic and 795 new store openings in the quarter contributed to a 36% increase in profits for Reliance’s retail business compared to last year .
Telecom arm Reliance Jio saw its gross revenue rise 22.8% year-on-year to Rs 285 billion, while adding 7.7 million net subscribers in the quarter.
In August, Ambani pledged $25 billion to launch 5G networks in India, aiming to strengthen its grip on one of the world’s fastest growing smartphone markets.
Reliance’s multi-billion dollar fortune was fueled by oil and petrochemical companies, but the company has branched out into new areas including telecommunications and retail in recent years.
The company’s shares closed down 1.16% in Mumbai ahead of the earnings announcement on Friday.