The Hindu Business Line : Reliance profit tops $1-billion mark

YET ANOTHER FIRST: Mr Anil D. Ambani, Vice-Chairman and Managing Director, Reliance Industries, at a press conference in Mumbai on Thursday. — Paul Noronha

Mumbai , April 29

DRIVEN by higher margins in its refining and petrochemicals businesses, Reliance Industries Ltd today became the first private sector Indian company to report annual earnings of more than a billion dollars.

The oil exploration-to-petrochemicals-to-textiles conglomerate today said its net profit rose 25.73 per cent to Rs 5,169 crore ($1.18 billion) in the financial year ended March 31, 2004, mainly because of higher product prices.

For the fourth quarter, net profit stood at Rs 1,419 crore (Rs 1,101 crore). It had reported a net profit of Rs 4,104 crore for the whole of the previous year.

Mr Anil Ambani, Vice-Chairman and Managing Director, Reliance Industries, told newspersons here that the company is targeting a growth of 20 per cent every year for the next five years. Mr Ambani expects Reliance to generate cash flows of more than Rs 50,000 crore in five years time. It currently has a cash flow of about Rs 10,000 crore.

RIL has announced a dividend of Rs 5.25 per share or 52.50 per cent amounting to a payout of Rs 825 crore, a news release said.

The company that credits 95 per cent of its revenues to its energy business saw net sales for the fiscal at Rs 52,026 crore, 13 per cent higher than Rs 45,910 crore last year. Exports including deemed exports amounted to Rs 14,969 crore during the year.

Reliance's earnings per share for the fourth quarter was Rs 10 against Rs 7.80 while EPS for the year was Rs 36.8 (Rs 29.3).

RIL's fourth quarter net sales were Rs 14,108 crore (Rs 12,755 crore). The company's petrochemicals turnover was 4.2 per cent lower at Rs 7,634 crore (Rs 7,961 crore) although its quarterly profits more than doubled to Rs 896 crore (Rs 382 crore) during the quarter.

"The petrochemicals business is hitting an up cycle. Current margins are at 50 per cent of the peak margins reached in the mid-nineties. Keeping this in mind, Reliance will invest in add 20 per cent to its existing capacities," Mr Anil Ambani, Vice-Chairman and Managing Director told presspersons.

Expenses for the quarter were Rs 11,462 crore (Rs 10,737 crore). The company spent Rs 107 crore on `employee separation' schemes during the year; the figure was Rs 32 crore for the fourth quarter.

Interest and depreciation for the quarter stood at Rs 349 crore (Rs 334 crore) and Rs 968 crore (Rs 877 crore) respectively.

RIL's stock closed over 2 per cent lower at Rs 529 per share on the Bombay Stock Exchange. According to analysts, although the company's overall performance was "better than expected", gross refining margins were not up to market expectations at $7.2 per barrel.