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Indian conglomerate Reliance Industries reported mixed quarterly results on Friday. Weakness in the core refining business hurt profits, despite strong earnings in the retail and telecom divisions.
Reliance, owned by Asia’s second richest man Mukesh Ambani, posted a net profit of 136.56 billion rupees ($1.65 billion) for the period from July to September, down 0.2% from the same period last year. .
Net profit fell by 24% from the June quarter to Rs 179.55 crore.
Operating revenue increased by 33.7% year-on-year to Rs 2,330 billion, supported by a strong contribution from Reliance’s new consumer business.
“We are pleased with the record performance of our consumer business, which continues to scale to new milestones each quarter,” Ambani, chairman and managing director, said in a statement.
But Reliance’s traditional petroleum-to-chemicals business was hit by “subdued demand” and “the introduction of a special excise tax during the quarter,” he added.
On July 1, India imposed tariffs on sales of gasoline, diesel and aviation fuel by oil refiners such as Reliance, in addition to a “windfall tax” on domestic crude oil sales.
Additional excise duties cost Reliance Rs 40.4 billion in the fourth quarter, the company said, with the planned plant closures further impacting the refinery’s earnings.
Total revenue of Reliance’s retail operations increased by 42.9% year-on-year to reach a record Rs 649.2 billion.
Reliance’s retail earnings increased 36% year-over-year, driven by a surge in foot traffic, a waning impact of the pandemic and 795 new store openings in the quarter.
Telecom arm Reliance Jio added 7.7 million net subscribers in the quarter, driving total revenue to Rs 285 billion, up 22.8% year-on-year.
In August, Ambani pledged $25 billion to launch a 5G network in India, aiming to consolidate his hold on one of the world’s fastest growing smartphone markets.
Reliance’s multi-billion dollar fortune has been underpinned by its petroleum and petrochemical businesses, but in recent years it has diversified into new areas such as telecommunications and retail.
The company’s shares closed 1.16% lower in Mumbai ahead of Friday’s earnings report.
ng/qan
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