Reliance Industries Limited (RIL) has reported its financial performance
for the quarter/year
ended 31st March 2018. Highlights are:
• Revenue increased by 39.0% to 129,120 crore ($ 19.8 billion)
• PBDIT increased by 45.9% to 20,664 crore ($ 3.2 billion)
• Profit Before Tax increased by 29.2% to 13,246 crore ($ 2.0 billion)
• Cash Profit increased by 30.4% to 15,408 crore ($ 2.4 billion)
• Net Profit increased by 17.3% to 9,435 crore ($ 1.4 billion)
HIGHLIGHTS OF QUARTER’S PERFORMANCE (STANDALONE)
• Revenue increased by 21.8% to 90,894 crore ($ 13.9 billion)
• Exports increased by 32.5% to 51,295 crore ($ 7.9 billion)
• PBDIT increased by 26.8% to 16,046 crore ($ 2.5 billion)
• Profit Before Tax increased by 19.0% to 11,907 crore ($ 1.8 billion)
• Cash Profit increased by 14.4% to 12,375 crore ($ 1.9 billion)
• Net Profit increased by 6.7% to 8,697 crore ($ 1.3 billion)
• Gross Refining Margin (GRM) of $ 11.0/bbl for the quarter
Crude prices touched near 3 year highs amid healthy demand growth projection, continued OPECled production cut and geo-political concerns. Asian Naphtha prices increased by 19% in FY18 from the previous year tracking the gain in crude prices. Ethylene and propylene prices in Asia increased by 6% and 8% respectively in FY18 Y-o-Y with supportive demand supply balance.
During FY18, PP prices were up 11% with healthy growth in demand. PP deltas also strengthened by 19% during the year. PE and PVC prices were up by 3% and 4% respectively in FY18, however PE deltas softened marginally due to stronger naphtha prices. PVC deltas strengthened by 10% in FY18 and reached 15 year highs during the quarter amid soft EDC prices in the high caustic price environment.
In India, polymer demand registered growth of 7% during FY18 supported by healthy economic indicators, infrastructure boost and higher disposable income. PP and PE registered a growth of 10% and 9% respectively in FY18 mainly in the segments of automotive, appliances, packaging, pipe and milk packaging. PVC demand recovered towards the end of the year and posted a growth of 2% in FY18. PVC demand increased sharply by 18% during 4Q FY18 Y-o-Y largely driven by pipe and calendaring sector.
RIL’s polymer production was up by 10% in FY18 Y-o-Y to 4.9 MMT with successful stabilization of ROGC and its downstream units ( PE and MEG) in 4Q FY18. RIL continues to maintain its leadership position in the domestic market with feedstock flexibility, enhanced reliability in operations and better
availability of products.
During 4Q FY18, polymer prices strengthened moderately Q-o-Q due to stable demand-supply scenario. On a Q-o-Q basis, this led to strengthening of PE margins by 8% to $ 677/MT and PVC margins by 6% to $ 617/MT. PP margins weakened by 10% to $ 287/MT on Q-o-Q with strength in propylene prices. 4Q FY18 domestic polymer demand grew by 7% QoQ and 16% YoY. RIL’s production during 4Q FY18 increased to 1.5 MMT, up 15% Q-o-Q and 37% YoY.
During FY18 polyester chain margins remained healthy with slower capacity growth relative to demand growth. This supported healthy operating rates and favourable margins for integrated players.
Intermediate markets strengthened, tracking oil and naphtha markets. FY18 PX price was higher by 5% Y-o-Y, however margins were weaker by 10% Y-o-Y due to higher feedstock prices. PTA price firmed up 9% Y-o-Y in line with the upstream prices, supported by tight supplies and firm demand. PTA delta firmed up 31% Y-o-Y and remained above 5 year average. MEG markets also remained buoyant with tight supplies and strong demand. FY18 price firmed up 23%
Y-o-Y and delta was higher by 26% Y-o-Y.
Polyester markets remained healthy and producers were able to pass on increase in cost to the downstream units. FY18 PFY price increased 13% Y-o-Y with delta firming by 14% Y-o-Y. The Chinese ban on imports of recycled feed continued to support virgin polyester markets – as a result, PSF FY18 prices increased by 17% Y-o-Y; with delta strengthening by 40% Y-o-Y. Global PET markets remained tight due to shutdowns in western markets, which aided
Asian players. FY18 PET prices firmed up by 14% Y-o-Y and delta gained by 19% Y-o-Y.
During 4Q FY18, fibre intermediate markets remained strong with robust downstream demand and tight supplies. PX prices gained 8% Q-o-Q and delta firmed 19% Q-o-Q to $ 371/MT. PTA prices gained 10% Q-o-Q and margins strengthened by 19% Q-o-Q to $ 150/MT. MEG prices firmed up by
8% Q-o-Q and delta gained by 13% Q-o-Q to $ 598/MT.
Polyester markets in 4Q FY18 was marked by slow recovery in the Chinese downstream market after the National holidays which kept sentiments cautious, impacting delta in a firm intermediates price environment. PFY prices gained 4% Q-o-Q while delta declined 12% Q-o-Q to $ 274/MT. PSF prices
improved by 5% Q-o-Q and delta dipped 14% Q-o-Q to $ 214/MT. PET markets however remained buoyant amidst expectations of good seasonal demand. PET prices gained 12% Q-o-Q and margins firmed up by 28% Q-o-Q to $ 206/MT.
Domestic polyester demand recovered with 4Q FY18 demand improving by 7% Q-o-Q and 11% Yo-Y.
Reliance polyester chain expansions have stabilised and are operating at optimal rates. FY18 RIL polyester chain production increased by 25% Y-o-Y reflecting commissioning of new capacities. Fibre intermediates production in FY18 increased to 9 MMT from 6.8 MMT and polyester production increased to 2.4 MMT from 2.2 MMT. RIL has successfully captured the upcycle in polyester industry with timely expansions across the chain
Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: “FY 2017-18 was a landmark year for Reliance where we establishedseveral records on both operating and financial parameters. Reliance has become the first Indian company to record PBDIT of over US$ 10 billion with each of our key businesses - Refining, Petrochemicals, Retail and Digital Services achieving record earnings performance.
Substantial synergies, productivity gains and production growth in our energy and materials business has allowed us to perform at very competitive levels despite the uptrend in oil prices through the year. We have established strong foundations in retailing and digital services business with world-class supply chain management and network infrastructure which will serve our customers well. It is very heartening to see the traction our service offerings are gaining, with discerning Indian consumers. The growing Indian market provides exciting opportunities to scale-up these businesses andmaximize long-term shareholder value in the coming years.”