Reliance Profit Jumps as costs fall; Revenue slides on oil hit
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By Sachin Ravikumar
BENGALURU - Reliance Industries Ltd's profit jumped in the final quarter of 2020 as it reined in spending, although the Indian conglomerate recorded a sharp fall in revenue from its dominant oil-to-chemicals business.
Reliance, led by billionaire Mukesh Ambani, said on Friday consolidated profit rose 12.6% year-over-year to 131.01 billion rupees ($1.79 billion) in the quarter ended Dec. 31. The rise was helped by a 22% fall in expenses.
Analysts on average had expected a profit of 110.09 billion rupees, according to IBES data from Refinitiv.
Reliance has built leading consumer-facing businesses in recent years to diversify away from its mainstay energy arm, but a coronavirus-driven slump in fuel demand has weighed on the Mumbai-headquartered group's overall business.
As the pandemic continues to restrict travel and business, although at a lesser intensity than at the height of the crisis, sales of refined products such as jet fuel have been falling.
"Transportation fuel markets continued to remain challenging with excess supply and second COVID-19 wave hurting demand from European and US markets," Reliance said in a statement.
Reliance, which operates the world's largest refining complex, said revenue from the oil-to-chemicals division fell nearly 30% in the December quarter.
The business now houses its oil refining, fuel retailing and petrochemicals operations, as part of a reorganisation announced Friday.
Overall, Reliance's revenue slid 21% to 1.24 trillion rupees.
Reliance's retail division reported an 18.7% drop in revenue, as only half of its over 12,000 stores were fully operational and footfall remained below pre-COVID levels.
The company's Jio telecom service - India's largest by subscribers - grew its revenue by nearly a third as it signed up 25 million customers in the quarter.
Jio is housed within Reliance's digital arm, Jio Platforms, which received more than $20 billion in investments last year including from Facebook and Alphabet Inc's Google.
($1 = 73.0200 Indian rupees)
(Reporting by Sachin Ravikumar in Bengaluru; Additional reporting by Nidhi Verma in New Delhi and Nivedita Bhattacharjee in Bengaluru; Editing by Anil D'Silva)
