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Reliance Industries Q2 profit grows 12.5% to Rs 8,109 crore: Mukesh Ambani's Jio logs Rs 271 crore net loss

The earnings have helped Reliance pump funds into its latest venture and the country's newest telecom operator Reliance Jio, which has posted a loss of Rs 270.5 crore in its first quarter of commercial operations.

Mail Today Bureau   New Delhi     Last Updated: November 5, 2017  | 12:22 IST
RIL Q2 net profit soars 12.5%: Reliance Jio's loss mounts to Rs 270.5 crore

Billionaire Mukesh Ambani-led conglomerate Reliance Industries on Friday posted12.79 per cent year-on-year rise in consolidated net profit at Rs 8,097 crore for the September quarter, driven mainly by earnings from its petrochemical and refining businesses. The oil-to-telecom company's revenue was up 23.9 per cent to Rs 1,01,169 crore. It earned $12 on turning every barrel of crude oil into fuel in the quarter, up from $10.1 a barrel gross refining margin a year ago.

The earnings have helped Reliance pump funds into its latest venture and the country's newest telecom operator Reliance Jio, which has posted a loss of Rs 270.5 crore in its first quarter of commercial operations. Jio's loss for the June quarter was Rs 21.3 crore. Standalone revenue from operations stood at Rs 6,147 crore for the September quarter, said Reliance Jio, whose subscriber base has swelled to over 138 million now.

However, the conglomerate said Jio will turn profitable "shortly" and that it will continue to pump around $1 billion into the venture for each of the next few quarters. The telecom company, which has disrupted the sector, formally launched 4G services in September 2016 with free voice and data offers. It started commercial operations from July 2017.

Jio's data consumption on its network reached 9.62 gigabyte (GB) per user per month, and voice consumption stood at 626 minutes per month. It recorded 178 crore hours of high speed video consumption a month. The average revenue per Jio user during the quarter stood at 156.4 per month.

The company said total wireless data traffic stood at 378 crore GB during the quarter while the average voice traffic stood at 267 crore minutes a day. The figures come against the backdrop of Indian telecom companies going through a phase of financial distress as they are also saddled with huge debt raised for financing costly spectrum purchases.

Telecom operators Idea Cellular and Reliance Communications registered their first ever consolidated loss in a quarter after Jio started its service. The country's largest telecom company Bharti Airtel's consolidated net profit plunged 74.89 per cent to Rs 367 crore for the June quarter of current financial year.

Airtel, Idea, and Vodafone have blamed the free offers by the newcomer for failing health of the industry, which is estimated to have a cumulative debt of Rs 4.5 lakh crore. Adding to the financial woes of the incumbent opera-tors, the telecom regulator has slashed the domestic mobile termination charges by nearly 58 per cent to 6 paise a minute, prompting many operators to approach the courts against the decision.

The price war has also triggered a wave of consolidation in the industry as large operators are either combining forces (Idea-Vodafone) or acquiring smaller players (Bharti's acquisition of Telenor and now the consumer mobile business of Tata Group) to protect their turf. Reliance chairman and managing director Mukesh Ambani said the uptake of Jio services reflects the latent need of the society.

"We are focussed on providing multi-layered digital services on top of the basic connectivity service to optimally utilise our world class infrastructure."

Meanwhile, Reliance Industries' pre-tax profit from the mainstay refining sector was up 10.8 per cent at Rs 6,621 crore year-on-year but it fell 11.4 per cent when compared to Q1 earnings.

The petrochemical business saw pre-tax profit jump 45.2 per cent to Rs 4,960 crore due higher volumes in the polyester chain and firm prices. "The results reflect strong underlying fundamentals of our refining and petrochemicals businesses. Sustained demand growth coupled with supply disruptions further tightened demand-supply balances globally during the quarter," Ambani said.

 

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