Reliance Industries posts its highest quarterly net profit in eight years
Reliance Industries (RIL), controlled by Mukesh Ambani, the country's richest man has reported its highest quarterly net profit in eight years, said the firm and it also plans to increase its capital expenditure by Rs 30,000 crore this fiscal to complete ongoing refining and petrochem projects as well as for the telecom business. Steep fall in oil prices has boosted RIL refining and petrochem margins to a record high of $10.8 a barrel, helping the company post a 16 per cent jump in earnings for the three months to March.
"Our capex in the reporting fiscal year stood at Rs 1.20 trillion and this will go up to Rs 1.5 trillion in the ongoing fiscal year. The money will be spent to complete the ongoing expansion projects at Jamnagar and the rollout of the telecom network," RIL Group Deputy Chief Financial Officer V Srikanth told reporters in Mumbai.
Giving a break-up, he said, Rs 50,000-60,000 crore will be needed to complete the ongoing multi-billion dollar expansion at the Jamnagar refinery complex and over Rs 60,000crore in Reliance Jio. The rest will be spent on otherverticals, including around Rs 3,500 crore in the retail arm.The company said Rs 1,000 crore will be pumped into the US shale gas operations as well.
On how much debt RIL will raise to meet the capex, Srikanth said not much as the company has a good cash balance. During the March quarter, RIL's cash balance stood at Rs 86,033 crore, down from Rs 91,736 crore in the December quarter, while its debt rose to Rs 1,81,079 crore from Rs1,78,07 crore in the October-December period, he said.
On Iran, Srikanth said the company has booked a small consignment of crude and long-term contracts could be thought of only after payment issue has been settled. RJio's Strategy and Planning head Anshuman Thakur said of the over Rs 60,000 crore capex for the telecom vertical,some of the money will be spent on widening the networkcoverage to 90 per cent as planned.
RIL has around 90,000 telecom towers now, half ofwhich are operational and owned by the RIL and rest on lease.Some money, which is yet to be finalised, will have to be paid to RCom as well, he said, but refused to quantify it. The company has already made an advance payment of Rs 2,800 crore to RCom, he added.