In the first quarter of this year, India’s Reliance Industries Ltd. posted a significant fall in profit due to the slump in oil prices and weak fuel demand.
Profit in the first three months of 2020 was INR63.48 billion (USD845 million), showing a stumble of 39% and the sharpest fall since December 2008. The consolidated revenues from operations dropped by 2.3% to INR1.39 trillion (USD18.5 billion).
The fall came from the energy division, the biggest contributor in the company.
Inventory loss of around INR42.45 billion (USD565 million) also heavily dented profitability in the quarter. Gross refining margin was USD8.90/barrel, down from USD9.20 in the previous quarter but still up by USD0.70 year-on-year.
The company’s other divisions posted better readings.
The telecom businesses showed a doubling revenue as more Indians set up for services. The retail business, which runs 10,000 stores selling groceries, consumer electronics, and apparel, posted a moderate rise of 4% increase revenue, partly affected by India’s nationwide lockdown.
Reliance has planned to raise money and eliminate net debt by the end of 2020 through some possible delays in the terms of a rights issue. As of March, the net debt was USD21.4 billion.
The company has established INR1,257/share (USD16.7/share) for India’s biggest rights issue of INR531.25 billion (USD7 billion) with a ration of 1:15.
