Reliance Industries Ltd announced its O2C Business segment results for the third quarter ended Dec 31, 2022.
Q3 Results- QoQ
The segment’s EBIDTA grew 16.36% to Rs 139.26 billion for the period ended Dec 31, 2022 as against EBIDTA of Rs 119.68 billion for the previous quarter due to weak margins.
Net sales decreased 9.4% to Rs 1.44 trillion during the period ended Dec 31, 2022 as compared to Rs 1.59 trillion during the previous quarter.
Q3 Results- YoY
The segment reported 2.9% increase in EBIDTA to Rs 139.26 billion for the period ended Dec 31, 2022 as against EBIDTA of Rs 135.3 billion for the prior-year quarter.
Net sales increased 10.05% to Rs 1.44 trillion during the period ended Dec 31, 2022 as compared to Rs 1.31 trillion during the prior-year quarter.
Q3 Highlights
- Revenues increased on account of higher price realisation as crude oil prices went up by 11%.
- Revenue growth was constrained by lower throughput with planned Maintenance & Inspection activity turnaround during the quarter.
- Exports increase led by higher price realisations despite lower downstream product volumes.
- Growth in EBITDA was supported by strength in middle distillate cracks. This was however, partially offset by weak margins across polymer, polyester chain and light distillates products.
- Continued SAED (Special Additional Excise duty) on transportation fuels also impacted earnings by Rs 18.98 billion.
- Polymer margins over Naphtha declined Y-o-Y due to sharp fall in Polymers prices with subdued demand from China, US and Europe and higher imports from Middle East to Asia. Prices declined across polymer products on Y-o-Y basis, PP (27%), PE (19%) and PVC (50%).
- India’s polymer and polyester demand improved Y-o-Y by 8% and 11% respectively. Agriculture, infrastructure, health & hygiene, consumer durables, and automotive industries drove the growth in polymer demand. Increased cotton prices and demand from the beverage segment supported the growth in polyester demand.
Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: “In O2C business, middle distillate product fundamentals remain strong with firm demand, constrained supply, and high natural gas prices in Europe. Downstream chemical products witnessed margin pressure with excess supply and relatively weak regional demand. Our focus remains on operating safely and reliably producing vital fuel and materials for consumers.”
9 Months – YoY
The segment reported 18.98% growth in EBIDTA to Rs 457.82 billion for the period ended Dec 31, 2022 as against EBIDTA of Rs 384.8 billion for the prior-year 9 months period.
Net sales increased 31.23% to Rs 4.66 trillion during the period ended Dec 31, 2022 as compared to Rs 3.55 trillion during the 9 months period last year.
Reliance O2C Business, a segment of Reliance Industries Ltd is a leading player in the Indian chemical industry engaged in the manufacture and sale of petrochemicals.
The Oil to Chemicals (O2C) business includes Refining, Petrochemicals, fuel retailing through Reliance BP Mobility Limited, aviation fuel and bulk wholesale marketing. It includes breadth of portfolio spanning transportation fuels, polymers, polyesters and elastomers. The deep and unique integration of O2C business includes world-class assets comprising Refinery Off-Gas Cracker, Aromatics, Gasification, multi-feed and gas crackers along with downstream manufacturing facilities, logistics and supply-chain infrastructure.