MUMBAI: India's Reliance Industries Ltd posted a sharper than expected 7.7 percent fall in quarterly profit as a steep decline in global crude oil prices hurt profitability at the energy conglomerate's core refining business.
A nearly 60 percent drop in crude oil prices since June has led to inventory losses and tepid interest from buyers, Reliance said in a statement on Friday, hitting the company's flagship refining operations.
Reliance, which operates the world's largest refinery complex in western Gujarat state, has been investing heavily in consumer-facing areas like retail and telecoms to expand beyond refining and petrochemicals.
The company's gross refining margin, or profit from each barrel of crude oil refined, fell to $7.3 per barrel in the quarter ended on Dec. 31, down from $7.6 per barrel a year ago, Reliance said.
Net profit was 50.85 billion rupees ($822 million) in the December quarter on a standalone basis, down from 55.11 billion rupees in the year-ago period, the Mumbai-based conglomerate said.
Analysts, on an average, expected the company to report net profit of 52.70 billion rupees, according to Thomson Reuters data.
Sales for the quarter fell in the company's petrochemicals, refining, and oil and gas businesses, pushing consolidated revenue down by more than a fifth to 963.30 billion rupees.
But the company said future earnings would get a boost from major expansion projects planned across its businesses coming on stream.
"We continued to advance our refining and petrochemicals business capital investments, which will come to fruition over the next 4-6 quarters," chairman Mukesh Ambani, India's richest man, said in a statement.
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