Date:30/04/2004 URL: http://www.thehindu.com/2004/04/30/stories/2004043007812000.htm

Business

Reliance beats market expectations

By Our Special Correspondent

MUMBAI, APRIL 29. Reliance Industries is the first private sector company in India to cross the Rs. 5,000 crore mark in net profit at Rs. 5,160 crores during the year ended March 31, 2004 against Rs. 4,104 crores in the previous year, a rise of 25.73 per cent. Net sales were higher by 12.9 per cent at Rs. 51,802 crores against Rs. 45,898 crores. The results are way up the market expectations which had predicted about 21-24 per cent rise in net profit.

The company has announced a dividend of 52.50 per cent for 2003-04 against 50 per cent. Earnings per share stood at Rs. 36.8 and cash EPS at Rs. 65.7.

For the fourth quarter ended March 2004, it registered a 28.9 per cent year-on-year increase in net profit at Rs. 1,419 crores while net sales have improved by 10.6 per cent to Rs. 14,108 crores. However, other income for the quarter has risen by 46.3 per cent to Rs. 477 crores from Rs. 326 crores.

Reliance would be making a capital expenditure of Rs. 35,000 crores in the next five years, said Anil Ambani, Vice-Chairman and Managing Director, Reliance Industries, while announcing the annual results of the company here today. However, the company would not be issuing any new equity. It would raise funds through internal accruals and by raising debt, he added.

"The significant improvement in diesel consumption during the second half of the year marks a welcome reversal of low to negative growth trends observed in the recent past. The improvement in operating margin, and 30 per cent growth in exports, in an environment that saw unprecedented firmness in crude oil prices, import tariff reduction across our various products and rupee appreciation against the dollar, demonstrates our ability to deliver superior financial performance under difficult business conditions," said Mr. Ambani.

During the year under review its refinery recorded 109 per cent of capacity utilisation based on the original nameplate design capacity of 27 million tonnes annually.

The refinery processed 29.6 million tonnes of crude. This compares favourably with the utilisation rates for other refineries, in India and abroad, at 91 per cent for North America, 87 per cent for Europe and 88 per cent for the Asia Pacific region, said Mr. Ambani, adding, "The full impact of the increased capacity is expected to be reflected from 2004-05 onwards."

Exports of refining products during the year under review were 7.61 million tonnes against 6.57 million tonnes. The work on the setting up of retail outlets at various locations continued as planned, Mr. Ambani informed. Reliance already has the necessary approvals for setting up 5,849 retail outlets in India. With phased completion of the setting up of retail outlets, Reliance will have significant presence in retail marketing of transportation fuels across the country, he added.

"Reliance expects to bring about a major shift in the retailing of transportation fuels," said Mr. Ambani. These retail outlets would have state-of-the-art supply chain management and fleet management systems. This will leverage Reliance Infocomm's information technology and communications infrastructure.

"These retail initiatives will further enhance long-term shareholder value through forward integration from refining into marketing," Mr. Ambani said.