Reliance Industries, the Indian conglomerate controlled by billionaire Mukesh Ambani, reported a 46.3 per cent increase in its fiscal first-quarter net profit as higher demand for oil products boosted the company's core oil-to-chemicals business.
Net profit attributable to owners of the company surged to 179.55 billion Indian rupees ($2.25bn) in the three months ending June 30, compared with 122.73bn rupees a year earlier, it said in a statement.
However, the results fell short of the average profit of 229.2bn rupees estimated in a Bloomberg poll of analysts.
"Geopolitical conflict has caused significant dislocation in energy markets and disrupted traditional trade flows," said Mr Ambani, chairman and managing director of Reliance Industries. "This, along with resurgent demand, has resulted in tighter fuel markets and improved product margins."
"Despite significant challenges posed by the tight crude markets and higher energy and freight costs, oil-to-chemicals business has delivered its best performance ever."
Revenue from the company’s oil-to-chemicals unit, home to both its refining and petrochemicals operations, recorded its best-ever quarterly performance with record revenue, the company said.
The unit's revenue jumped 56.7 per cent to 1.62 trillion rupees on higher crude oil and product prices. The average price for Brent, the key benchmark for two thirds of the world's oil, is up 65 per cent year-on-year to $113.9 per barrel.
"The EU embargo on Russian oil products, higher gas to oil switching, strong travel demand and lower product inventory levels resulted in tight fuel market," Reliance said.
The company, which operates the world's largest oil refining complex, is pivoting towards green energy, in which it plans to invest $76bn. Reliance is building four giga-factories for making electrolysers for green hydrogen, solar modules, fuel cells and storage batteries.
"Our new energy business is forging partnerships with technology leaders in solar, energy storage solutions and the hydrogen ecosystem. These partnerships will help us realise the vision of clean, green and affordable energy solutions for all Indians," Mr Ambani said.
Jio, Reliance Industries’ telecom unit, reported a 24.1 per cent year-on-year increase in first-quarter net profit to 43.35bn rupees, as it added 9.7 million subscribers and reached a total customer base of 419.9 million as of June 30.
Jio's average revenue per user (ARPU), a key performance metric, during the quarter was at 175.7 rupees per subscriber per month, an increase of 27 per cent year-on-year, the company said.
Reliance’s retail unit recorded its first-quarter profit without any operating disruptions since the onset of Covid-19, with net profit more than doubling from the same period a year ago to 20.61m rupees, the company said.
Footfalls rose to 175 million for the quarter, or 19 per cent above pre-Covid levels, as consumers returned to stores.
"Consumer spending got a boost as families indulged in leisure activities, socialising, festivities and shopping as the Covid situation improved, though sentiments remained cautious due to inflationary concerns," it said.
Reliance Industries' said its debt as of June 30 was 2.63tn rupees compared to cash and cash equivalents of 2.06tn rupees.