Reliance Industries, the Indian conglomerate controlled by billionaire Mukesh Ambani, reported a 42 per cent increase in fiscal third quarter net profit as the group recorded growth across its units, while higher demand for oil products boosted its core chemicals-to-oil business.
Net profit attributable to owners of the company, surged to 185.5 billion rupees ($2.5bn) in the three months to the end of December, from the same quarter in the previous year, it said on Friday. The results beat the average 152.6bn rupee profit expectation of analysts polled by Bloomberg.
Revenue from operations grew nearly 54 per cent year-on-year to $25.7bn.
Reliance has posted best-ever quarterly performance in Q3 FY22 with strong contribution from all our businesses
Mukesh Ambani,
chairman and managing director, Reliance Industries
“Reliance has posted best-ever quarterly performance in Q3 FY22 with strong contribution from all our businesses. Our consumer businesses, retail and digital services have recorded highest ever revenues and Ebitda [earnings before interest, taxes, depreciation, and amortisation],” Mr Ambani, chairman and managing director of Reliance Industries, said.
“During this quarter, we continued to focus on strategic investments and partnerships across our businesses to drive future growth.”
Reliance Industries’ telecom unit Jio reported a 9 per cent annual rise in third quarter profit to $511 million as it added 10.2 million customers and reached a total customer base of 421 million as of December 31.
Revenue from the company’s oil-to-chemicals unit, home to both its refining and petrochemicals operations, rose 57 per cent to $17.7bn on the back of the increase in oil prices and higher volumes.
“The recovery in global oil and energy markets supported strong fuel margins and helped our O2C business deliver robust earnings. Our oil and gas segment delivered strong growth in Ebitda with volume growth and improved realisation,” Mr Ambani added.
The company has a target to reach net-zero carbon by 2035.
“We are making steady progress towards achieving our vision of net-zero carbon by 2035. Our recent partnerships and investments in technology leaders in the solar and green energy space is illustrative of our commitment to partner India and the world in the transition to clean and green energy,” Mr Ambani said.
"We continue to pursue growth initiatives and collaborate with global leaders who share our vision of a sustainable future for our planet.”
Reliance’s retail arm recorded a 23 per cent year-on-year jump in third quarter net profit to $304m as the company “recorded all time high revenues across all consumption baskets driven by highest ever store sales and sustained growth momentum in digital and new commerce”.
“Retail business activity has normalised with strong growth in key consumption baskets on the back of festive season and as lockdowns eased across the country,” Mr Ambani said. “Our digital services business has delivered broad-based, sustainable, and profitable growth through improved customer engagement and subscriber mix.”
During the quarter, the company opened 837 new shops, taking the total count to 14,412 stores.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
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Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
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Company%20profile
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Mohammed bin Zayed Majlis
'Cheb%20Khaled'
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Disability on screen
Empire — neuromuscular disease myasthenia gravis; bipolar disorder; post-traumatic stress disorder (PTSD)
Rosewood and Transparent — heart issues
24: Legacy — PTSD;
Superstore and NCIS: New Orleans — wheelchair-bound
Taken and This Is Us — cancer
Trial & Error — cognitive disorder prosopagnosia (facial blindness and dyslexia)
Grey’s Anatomy — prosthetic leg
Scorpion — obsessive compulsive disorder and anxiety
Switched at Birth — deafness
One Mississippi, Wentworth and Transparent — double mastectomy
Dragons — double amputee
