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Reliance Q4 net down 21 pc -- Full year's profit increases 10 pc to Rs 2,646 cr

Our Bureau

MUMBAI, April 30

RELIANCE Industries Ltd (RIL) has reported a net profit of Rs 2,646 crore ($ 567 million) for the year ended March 31, 2001 registering a 10 per cent increase over Rs 2,403 crore ($ 551 million) in the previous year.

Total sales were higher at Rs 28,008 crore ($ 6.008 billion) as against Rs 20,301 crore.

It has recommended a dividend of 42.5 per cent which, including dividend tax, will lead to an outflow of over Rs 494 crore ($ 106 million) for the year.

As per US GAAP and after reconciliation of income before extraordinary items and cumulative effect of accounting changes, the consolidated net income for the year is Rs 2,036 crore ($ 436 million).

Net profit for the fourth quarter ended March 2001 was down by 21 per cent to Rs 540 crore from Rs 654 crore same period last year.

According to the company management, after adjustment for change in depreciation method (Rs 163 crore) and one-time cost related to Gujarat earthquake (Rs 14 crore) and gains in foreign exchange (less Rs 97 crore), the net profit was Rs 620 crore, up 22 per cent over Rs 509 crore.

The management said that profit margins were squeezed as a result of sharp increase in prices of major feedstocks such as crude oil during the greater part of the year under review. ``The rise in product prices lagged increase in feedstock prices, leadin g to overall pressure on profitability,'' Mr Anil Ambani, Managing Director of RIL, said.

The operating margins largely remained stable at 20 per cent as a result of increased production volumes, higher product prices partially mitigating rise in feedstock prices, increased efficiencies, higher value addition and rationalisation of duties and rupee depreciation.

During the year, RIL repatriated Rs 3,858 crore ($ 844 million) out of its foreign currency monetary assets lying abroad. The profit for the year includes Rs 547 crore, as against Rs 328 crore last year, on account of exchange difference arising on repat riation. Other income dropped mainly on account of lower interest income as a result of reduction in foreign currency assets and conversion of interest bearing debentures in equity held in Reliance Petroleum.

RIL, ranked as second largest producer of POY and PSF in the world and largest polyester manufacturer in India with market share of 51 per cent, achieved production volume of 10.4 million tonne, an increase of 16 per cent over last year. The manufactured exports, including deemed exports doubled to Rs 2,960 crore from Rs 1,478 crore last year.