--Reliance Industries 2Q net profit come in roughly in line with estimates
--Reliance Industries 2Q sales rose to INR785.69 billion
--Gross refining margin of $10.10/barrel slightly disappoints
--Reliance says it has received all payments that were due from BP; production-sharing contracts under deal have been revised and submitted to government for approval
(Adds earnings details, beginning in the fifth paragraph.)
MUMBAI (Dow Jones)--Reliance Industries Ltd. (500325.BY) Saturday posted a 16% rise in second-quarter net profit mainly helped by higher refining margins that offset a decline in its exploration business.
The refiner and explorer's net profit for the July-September period rose to INR57.03 billion ($1.16 billion) from INR49.23 billion a year earlier.
The quarterly profit was roughly in line with the average estimate of six analysts polled by Dow Jones Newswires, who expected Reliance Industries to post a net profit of INR57.42 billion.
Sales rose to INR785.69 billion from INR574.79 billion.
However, Reliance Industries' gross refining margin was slightly below expectations. It averaged $10.10 a barrel in the second quarter, up from $7.90 a barrel a year earlier, while analysts expected GRMs of as much as $11 a barrel.
"Our first-half financial performance has been consistent. The increase in profits was largely driven by improved performance in the refining and petrochemicals business," Mukesh Ambani, chairman and managing director, said in a statement.
Reliance Industries is India's largest company by market value and accounts for about a third of the country's refining capacity. Its Jamnagar refining complex in western India is the world's largest with a nameplate crude processing capacity of 1.24 million barrels a day.
It processed 17.1 million tons of crude in the second quarter and its refineries operated at 110% capacity, the company said.
Reliance Industries has three primary businesses of refining, exploration and petrochemicals. Second-quarter revenue from refining rose 37.1% to INR680.96 billion, petrochemical revenue rose 39.5% to INR210.66 billion, but revenue from oil-and-gas production fell 17% to INR35.63 billion.
The company had cash and cash equivalents of INR614.90 billion as of the end of September.
The company, led by billionaire Mukesh Ambani, has been accumulating cash reserves, raising concern among investors that it lacks a formal investment plan and growth momentum.
It recently concluded a $7.2 billion deal with BP PLC (BP, BP.LN) under which it sold a 30% stake in 21 oil-and-gas exploration blocks to the British explorer.
Reliance said it has received all the payments that were due from BP, with the final installment of INR146.90 billion received on Oct. 3. It said all the production-sharing contracts under the deal with BP have been revised and submitted to the government for approval.
"The integration process is currently under way, and the joint teams are evolving strategies to operate across the gas value chain in India from exploration, development, distribution and marketing," Reliance said. They are also trying to raise D6 gas output.
Reliance said its Infotel Broadband Services unit is in the process of setting up a 4G broadband wireless network and finalizing arrangements with global players.
Order free Annual Report for BP plc
Visit http://djnweurope.ar.wilink.com/?ticker=GB0007980591 or call +44 (0)208 391 6028
Copyright © 2011 Dow Jones Newswires
