Date:11/01/2006 URL: http://www.thehindubusinessline.com/2006/01/11/stories/2006011103240100.htm

Back Reliance Q3 net drops 15 pc — `Caused by shutdown'

Our Bureau

Mumbai , Jan. 10

RELIANCE Industries Ltd (RIL) has reported a 15-per cent drop in net profit for the third quarter of 2005-06 at Rs 1,776 crore, down from Rs 2,091 crore in the year-ago period.

The company attributed the slump in profits to a 45-day partial shutdown of its Jamnagar refinery for maintenance during October-November 2005.

As a result of the shutdown, the refining margins were down at $9.10 a barrel against $10.40 a barrel in the previous quarter. The volume of crude processed also came down to 6.70 million tonnes during the period from 7.95 million tonnes in the previous quarter, the company said.

However, the net sales during the period climbed to Rs 18,168 crore from Rs 17,768 crore in the third quarter of 2004-05.

Higher than market forecast: Earlier, the market had forecast a 6-8 per cent drop in RIL profits. According to an analyst, the markets were expecting a lower profit on account of the refinery shutdown.

"Today's fall in the RIL share more or less justifies the lower profits. There is unlikely to be further selling pressure on the RIL counter when markets open on Thursday," the analyst said.

The profit before tax stood at Rs 2,138 crore against Rs 2,504 crore in the corresponding previous period.

Reliance posted a net profit of Rs 6,567 crore for the nine-month period, up 24 per cent from Rs 5,280 crore in the previous corresponding period.

Net sales during the nine months stood at Rs 56,669 crore, up from Rs 48,212 crore in 2004-05.

Share price dips: The index heavyweight RIL share fell by Rs 16.15 (1.78 per cent) to close at Rs 893.55 on the BSE today from yesterday's close of Rs 909.70.

The RIL scrip will be traded in its present form only till January 17, as the four new de-merged entities will come into being on January 18.

As per the scheme of arrangement, to settle ownership issues between Mr Mukesh Ambani and Mr Anil Ambani, net assets of Rs 19,120 crore have been demerged from RIL to the four resulting entities. Reliance Communication Ventures Ltd will account for the bulk of the assets at Rs 15,389 crore, while Reliance Energy Ventures Ltd will have Rs 2,921 crore, Reliance Capital Ventures Ltd Rs 513 crore and Reliance Natural Resources Ltd Rs 297 crore. Meanwhile, Reliance said it has devalued the plant, equipment and buildings situated at Patalganga, Hazira and Jamnagar as on August 1, 2005 by Rs 22,497 crore and an equivalent amount has been credited to the revaluation reserve account.