New Delhi | Jagran Business Desk: The Reliance Industries -- owned by billionaire Mukesh Ambani -- on Friday said that it reported a net profit of Rs 12,273 crore in the first quarter of the financial year 2021-22 compared to Rs 13,233 crore a year ago. This, the comapny said, is a drop of seven per cent compared to last year.

The company blamed the COVID-19 pandemic and the subsequent lockdown imposed behind the decline in its Q1 net profits. "The Group's operations and revenue were impacted due to COVID-19. During the current quarter, there is no significant impact other than in Retail segment," it said.

Expenses, including taxes, soared over 50 per cent, neutralising gains in oil-to-chemicals (O2C), telecom and retail businesses. Expenses rose to Rs 1.31 lakh crore, including tax expenses climbing to Rs 3,464 crore, it said.

It said that half of the firm's pre-tax earnings (EBITDA) came from traditional oil refining and petrochemicals and gas businesses. Consumer-facing businesses contributed 44 per cent.

Operating profit for the firm's cash-cow oil-to-chemicals (O2C) business rose on better refining and petrochemical margins. Segment EBITDA jumped 50 per cent to Rs 12,231 crore, it noted.

The operator of the world's largest oil refining complex saw improvement in earnings from turning crude oil into fuel on account of inventory gains and recovery in spreads. Its petrochemicals segment too stayed healthy.

Jio Platforms, which houses the firm's telecom arm, posted a 45 per cent jump in net profit to Rs 3,651 crore in April-June as it added over 4.2 crore net subscribers.

But the larger consumer base of 44 crore also meant that its per user earning remained flat at Rs 138.4 per month. Both data and voice traffic saw significant rise as most people worked from home and students took classes online.

With a resilient grocery business and strong growth in consumer electronics and fashion, the retail segment saw net profit more than double to Rs 962 crore. The profit surge was also due to the low base of last year when the nation was under a stringent COVID lockdown, which muted economic activity.

The firm added 12 stores to take the number of stores to 12,803. The start of gas production from newer discoveries in the eastern offshore KG-D6 block led to the company seeing its third straight quarter of pre-tax profits in the segment after many years.

Commenting on the results, Mukesh D Ambani, chairman and managing director of Reliance Industries, said the company "delivered robust growth despite facing a highly challenging operating environment caused by the second wave of the COVID pandemic."

"The results of the first quarter of FY2022 clearly demonstrate the resilience of Reliance's diversified portfolio of businesses that cater to large parts of the consumption basket," he said.

The O2C business, he said, generated strong earnings through an integrated portfolio and superior product placement capabilities.

Commissioning of satellite cluster gas fields in KG-D6 block has helped ramp up production, contributing to 20 per cent of gas production in India. "This will be a major contribution to our country's energy security," he said.

Ambani further said Jio has posted yet another record quarterly performance with industry-leading operating metrics.

"COVID-related restrictions on store operations during the quarter impacted our retail business operations and profitability. This is a temporary phenomenon. We remained focused on ensuring supplies of necessities, including food, grocery, health and hygiene products through a combination of online-offline channels," he said.

Reliance has stepped up efforts in creating partnerships with small merchants and digital engagement with consumers. "This is creating a newer and inclusive model of growth. I am confident that the retail business is poised to create exponential value and growth," he added.

Reliance's consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter was up 27.6 per cent year-on-year at Rs 27,550 crore, a record quarterly performance.

While the firm expanded e-commerce in the retail business, the telecom segment saw quarterly traffic of over 20 exabytes or 20 billion GB -- a growth of 38.5 per cent.

Total voice traffic during the quarter of 1.06 trillion minutes was nearly 20 per cent higher than last year.

Jio is poised to continue its leadership position with new offerings including Jio Next phone and strong growth in JioFiber, which currently has over 3 million connected homes.

KG-D6 is currently producing about 18 million standard cubic metres per day of gas.

(With PTI inputs)

Posted By: Aalok Sensharma