India’s RIL fiscal Q1 oil-to-chemicals earnings fall 14% on poor margins

SINGAPORE (ICIS)–Reliance Industries Ltd’s (RIL) oil-to-chemicals (O2C) business posted a 14.3% year-on-year drop in earnings in its fiscal first quarter ending June 2024 on poor chemicals margins, the Indian conglomerate said.

O2C results

in 10 million rupees (Rs)	Apr-June 2024	Apr-June 2023	% Change
Revenue	157,133	133,031	18.1
EBITDA	13,093	15,286	-14.3
Exports	71,463	69,006	3.6

– Revenue for the period rose primarily on the back of higher product prices in line with Brent crude price gains, and increased volumes due to strong domestic demand, the company said on 19 July.
– Fiscal Q1 overall earnings before interest, tax, depreciation and amortisation (EBITDA) margin dropped to 8.3% from 11.5% in the same period of last year.
– On a year-on-year basis, April-June domestic polymer and polyester demand increased by 8% and 5%, respectively.
– RIL’s consolidated group profit after tax fell by 4% year on year to Rp175 billion ($2.09 billion) in April-June 2024.

Polymers
– Fiscal Q1 polymer margins were down by 0.5% to 16.9% year on year due to firm naphtha prices.

Product margin over naphtha	April-June 2024 ($/tonne)	April-June 2023 ($/tonne)	% Change
Polyethylene (PE)	330	397	-16.9%
Polypropylene (PP)	318	381	-16.5%
Polyvinyl chloride (PVC)	371	373	-0.5%

Polyester
– Paraxylene (PX) and monoethylene glycol (MEG) margins over naphtha decreased year on year due to higher naphtha prices.
– “PTA [purified terephthalic acid] margins were impacted adversely due to high inventory with Chinese producers and increased competition,” the company said.
– On a year-on-year basis, domestic polyester demand in fiscal Q1 increased by 5%, driven by strong growth in PET, which was up 27% due to “higher demand from the beverage segment on account of summer season and elections”.

($1 = Rs83.7)