Reliance Industries Ltd. manufactures petrochemicals, synthetic fibers, fiber intermediates, textiles, blended yarn, and polyester staple fiber. The Company also owns a petroleum refinery cum petrochemicals complex in Jamnagar, India that produces a wide range of products such as gasoline, superior kerosene oil, and liquefied petroleum gas.
The share price of Reliance Industries touched an Intraday high of Rs 1,492.15 (up 5%) ahead of its result on 30th April 2020.
Oil-to-telecom conglomerate Reliance Industries (RIL) has reported a decline in revenues by 2% to Rs 1,39,283 crores as compared to Rs 1,42,565 crores in the previous quarter ended in March 2019. They have reported a decline in EBITDA by 11% to Rs 21,619 crores as compared to Rs 24,047 crores. The PAT for the company stood at Rs 6,546 crores down by 37% as compared to Rs 10,427 crores in the previous quarter ended in March 2019.
Across segment revenues, the company's Petrochemicals division degrew by 24% to Rs 32,206 crores, Refining division degrew by 3% to Rs 84,854 crores, Oil & Gas division degrew by 42% to Rs 625 crores while Organised Retail division grew by 4% to Rs 38,211 crores, Digital Services division grew by 30% to Rs 18,632 crores, Financial Services division grew by 108% to Rs 671 crores and Other business divisions grew by 116% to Rs 17,155 crores in the quarter ended in March 2020.
"I am pleased to announce that despite the daunting challenges arising from the fallout of the global pandemic, our company has once again delivered a resilient performance for FY 2019-20. Our O2C (Oil to Chemicals) businesses delivered sustained earnings due to its integrated portfolio, cost-competitiveness, feedstock flexibility, and product placement capabilities. We continue to operate all our major facilities at near-normal utilization levels. Our consumer businesses further strengthened their leadership positions and recorded robust growth on all operating and financial parameters during the year. Both Retail and Jio, continue to work towards providing superior products and services to Indian consumers. We are fully committed to our investment plans in our consumer businesses and new initiatives. We are at the doorsteps of a huge opportunity and our rights issue and all other equity transactions will strengthen Reliance and position us to create substantial value for all our stakeholders. Indeed, converting the corona crisis into a new opportunity, Reliance will innovatively step up its plans to create much greater societal and shareholder value. I am confident that our India and Reliance will emerge stronger in the post-Covid-19 world. Corona Haarega, India Jeetega!" said Mr. Mukesh Ambani, Chairman, and Managing Director.
The fourth-quarter results were a bit tepid due to the COVID-19 lockdown impact. Global oil markets witnessed significant volatility on account of demand destruction and excess supplies. Lockdowns and travel restrictions in most geographies led to a steep fall in transportation fuel demand. Global oil demand in CY20 is expected to fall by 9.3 mb/d YoY, the lowest level in the last 8-years. As a result, global refining utilization and economics are likely to get impacted in the near term. The pandemic outbreak also impacted the Petrochemical segment during the quarter with demand slowdown in most end-use markets including consumer discretionary and packaging demand. The company maintained normal utilization at all major facilities, gradual resumption of economic activity in the coming months is expected to aid demand recovery for fuels and petrochemical products. The Non-grocery retail business was impacted by the nation-wide lockdown. The retail segment operated most of its food and grocery formats in consonance with local directives. Retail grocery stores ensured the supply of essential goods and other items of daily use to consumers and Digital Services ensured uninterrupted connectivity for families, businesses, and government agencies; further enabling health-care at home, work from home, and learn from home.
Here are the key takeaways from RIL's Q4FY20 earnings:
Jio rings in solid gains: Telecom arm Jio's standalone revenue from operations, including access revenues, have increased to Rs 14,835 crore, with standalone EBITDA of Rs 6,201 crore and EBITDA margin of 41.8%. Standalone Net Profit was at Rs 2,331 crore during the quarter and at Rs 5,562 crore for the full year, showing an annual increase of 88%. Subscriber base as on 31st March 2020 was at 387.5 million (26.3% YoY growth), with ARPU during the quarter of Rs 130.6 per subscriber per month. Reliance Industries Limited, Jio Platforms Limited, and Facebook has announced the signing of binding agreements for an investment of Rs 43,574 crore by Facebook into Jio Platforms. Facebook’s investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis. This would place JPL amongst the top5 listed companies in India by market capitalization within just three and a half years of the launch of commercial services.
Organized Retail business deliveries another good year: Reliance Retail reported highest-ever revenue and EBITDA, against the backdrop of a challenging environment. Ranked as the fastest-growing retail company in the world (Global Powers of Retailing 2020, a Deloitte report) it now operates 11,784 stores covering 28.7 million square feet with over 1,500 stores opened in the year and a record 30% retail space added. Footfalls at 640 million, were up 17% YoY with 125 million registered / loyal customer base, up 40% YoY. In Consumer Electronics, Reliance Digital continues to maintain its leadership position. Fashion and Lifestyle category delivered a credible performance despite the shutdown. Grocery category witnessed strong growth led by SMART and Reliance Fresh, driven by store expansion and like for like growth in existing stores. During March, grocery stores recorded their highest ever sales surpassing the Diwali month performance despite logistical challenges.
Refining and Marketing business declines: FY20 revenue from the Refining & Marketing segment declined by 1.6% YoY to Rs 3,87,522 crore ($ 51.2 billion) and Segment EBIT decreased by 6.8% YoY to Rs 21,334 crore ($ 2.8 billion). R&M segment revenue was impacted due to lower price realizations in domestic as well as export markets due to a fall in crude prices. GRM for FY20 was at $ 8.9/bbl, outperforming Singapore complex margins by $ 5.7/bbl.
Petrochemicals business underperforms: FY20 revenue from the Petrochemicals segment decreased by 15.6% to Rs 1,45,264 crore ($ 19.2 billion) due to lower price realizations with weaker demand in well-supplied markets. Petrochemicals segment EBIT was at Rs 25,547 crore ($ 3.4 billion), down 21.1% as compared to the previous year, due to lower margins in key products - Paraxylene, MEG, PET, Polypropylene, and Polyethylene.
Oil & Gas business witness fall in revenues: FY20, revenue for the Oil & Gas segment decreased by 35.8% to Rs 3,211 crore. Segment EBIT was at Rs (1,407) crore as against Rs (1,379) crore in the previous year. Volumes from conventional fields and US shale were lower on account of natural decline and slowdown in development activity. Domestic production was lower at 38.8 BCFe, down 34.1% YoY and production in US Shale operations declined by 14.9% to 80.4 BCFe.
Media business revenues increases: Network18 Media & Investments Limited reported 4QFY20 consolidated revenue of Rs 1,464 crore an increase of 18.9% YoY. Rise in the ranking of flagship Entertainment channel and upsurge in News consumption helped the group post growth in ad-revenues in the quarter, even as advertising was severely impacted during late-Q4 due to the COVID-19 related lockdown.
Increase in Liabilities: The company has reported an increase in its Total Liabilities from Rs 6,07,014 crore in March 2019 to Rs 7,04,568 crores in March 2020.
Cash balance rises: Cash and cash equivalents were at Rs 30,920 crores as compared to Rs 11,081 crores in the previous quarter ended in March 2019.
EPS reduces: Basic Earnings per Share (EPS) stood at Rs 10.01 as compared to Rs 17.49 in the quarter ended in March 2019.
Other Key Points:
The company announces dividend of Rs 6.50 per share for FY20
Announces India's biggest Rights Issue of Rs 53,125 crore in the ratio of 1:15 which is priced at Rs 1,257 per share
To complete capital raise of over Rs 1,04,000 crores by Q1FY20 which includes Rights Issue, Facebook investment, and the previous investment by British Petroleum.
Jio Platforms also received interest from other global investors for similar-sized additional stake just like Facebook
Approved a Scheme of Arrangement for transfer of O2C Undertaking (as defined in the Scheme) of the Company to Reliance O2C Limited
Saudi Aramco due diligence on track
To achieve net-zero debt status ahead of its timeline