Reliance Industries Ltd.., The largest Indian company by market value, reported its first profit increase in more than a year as higher sales of natural gas exceed the lower income from oil processing.
Net income in the first quarter December 31 rose 16 percent to 40.08 billion rupees ($ 868 million) over the previous year, the browser Mumbai-based energy and refiner. The first increase in profit in five quarters to beat the 39.14 billion-rupee median estimate of nine analysts surveyed by Bloomberg News.
Increased reliance on production in the largest gas field in India after starting production in April and increased revenues can help fund the company’s offer to acquire the maker of chemicals and fuels LyondellBasell Industries AF bankrupt. The Indian company, controlled by billionaire Mukesh Ambani, plans to expand worldwide and has said it may buy oil fields in the Gulf of Mexico and Brazil.
“Gas is the main driver of profits and will continue,” Maulik Patel, head of research at KR Choksey Shares and Securities Pvt., Said by telephone from Mumbai. “We can expect more surprises in the exploration and production side.
The unit, which has the largest weighting in the benchmark Sensitive, changed very little during the closure 1053.85 rupees in Mumbai trading yesterday. The stock has advanced 85 percent in the last year, trailing the 91 percent increase in the rate sensitive.
The benefits of gas
Pretax income from oil and gas sales exceeded earnings from refining, for the first time, the statement said. Revenues from oil and gas more than doubled to 14.77 billion rupees, while refining declined 27 percent to 13.79 billion rupees.
Reliance earned $ 5.90 per barrel of oil went to fuel in the quarter compared with $ 10 a barrel a year earlier, the company said. The global refining margins, or revenues from processing oil into fuel, fell to $ 1.49 per barrel in the fourth quarter December 31 of 6.2 dollars per barrel in the quarter ended March 31, according to BP Plc.
Net sales for the quarter rose 92 percent to 568.6 billion rupees, Reliance, said in the statement.
The unit, which also operates chemical plants and a national level, 950-store retail trade, said in November that made a nonbinding bid to buy a LyondellBasell all-cash deal. The company raised about $ 2 billion stock sale since September, Alok Agarwal, chief financial officer, said yesterday in Mumbai.
The money “will increase our ability to make important decisions and capital expenditures for international growth opportunities,” said Agarwal, told reporters.
Debt, cash
Reliance had an outstanding debt of Rs 700 million and cash and cash equivalents of 159.6 billion rupees as of December 31, according to the statement yesterday.
Shopping in Holland with the chemicals maker, which can be worth as much as 14.5 billion U.S. dollars, create a company with more than $ 80 billion in revenue and making chemical plants and the dependence of two crude oil refineries in U.S. and Europe.
The acquisition of foreign assets Trust can help cover the risk of investing in India. The unit is awaiting the verdict of the Supreme Court of India in a suit for the sale of gas from the KG-D6 field in the Bay of Bengal.
Anil Ambani, estranged brother Mukesh Ambani, Reliance Industries wants to supply gas to his company at a rate agreement that splits the family business. Reliance says it can not sell the fuel unless the fee fixed by the government later. The Court reserved the arguments of the sentence after the trial last month.
Fertilizers, energy producers
The field currently produces 60 million cubic meters of gas sold to customers, including fertilizers and energy producers selected by the government. The company produces no gas from the KG-D6 field last year.
Peak output of 80 million cubic meters per day can be reached in mid-2010, the government said last month. That will double the availability of gas in India and Reliance to fuel the largest producer in the South Asian nation.
The dependence of the world’s biggest oil processing complex in December 2008 in Jamnagar in western India, where two adjacent refineries have a combined capacity to process 1:24 million barrels of oil per day.
Reliance processed 44.25 million tons of crude oil in the nine months ended December 31, according to the statement. The refiner exported 23.6 million tons of petroleum products in the period compared to 16.2 million tonnes last year.
Oil in New York has won 63 percent in the last year. Prices rose 12 percent in the quarter compared with a 56 percent decline last year.
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