Published: Fri, January 19, 2018
Money | By Armando Alvarado

Reliance Jio turns profitable in less than 18 months since launch

Reliance Jio turns profitable in less than 18 months since launch

"Jio has demonstrated that it can sustain its strong financial performance", Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said in a statement.

Reliance Jio Infocomm Ltd, in which the conglomerate has invested more than $30 billion, reported its first quarterly profit of 5.04 billion rupees ($78.97 million). The telco posted a revenue of Rs 6,879 crore, up almost 12% on quarter from Rs 6,147 crore in the previous quarter.

Jio posted a net profit of Rs 504 crore compared with a loss of Rs 271 crore in the preceding quarter.

The fall in the refining segment's profit, despite gross refining margin (GRM) improving to $11.6 a barrel in the December 2017 quarter from $10.8 a barrel in the year-ago period, was due to a dip in crude volumes refined during the quarter.

Revenues from this segment were higher around 48 per cent at Rs 33,726 crore against Rs 22,854 crore in the same period previous year.

On a consolidated basis, which also includes Reliance Industries's U.S. shale gas, retail, telecom and other operations, profit came in at Rs9,423 crore, the company said in a statement on Friday.

On the other hand, operating profit in the organised retail segment more than doubled y-o-y to ₹487 crore in the December quarter.

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Jio started commercial operations in second quarter of 2017-18 fiscal.

At operational level, Jio's EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 82 percent sequentially to Rs 2,628 crore in Q3 and margin expanded by 1,470 basis points to 38.2 percent compared to previous quarter.

Net profit on a standalone basis, which only comprises Reliance's main refining, petrochemicals and oil and gas exploration businesses, rose to 84.54 billion rupees in the quarter ended December 31, slightly ahead of analysts' expectations of 83.94 billion rupees.

Reliance Industries Ltd's (RIL's) profit on a standalone basis, which includes the company's refining, petrochemicals and oil and gas exploration businesses, but primarily excludes retail and telecom operations, stood at Rs8,454 crore in the quarter ended 31 December, up from Rs8,022 crore a year earlier. "Benefits of the large investments in petrochemical business are beginning to show with the segment reporting its highest-ever earnings". Jios subscriber base as on December 31, 2017 stood at 160.1 million.

"Jio's strong financial result reflects the fundamental strength of the business, significant efficiencies and right strategic initiatives", Ambani said in a statement.

Jio late last month signed a deal to buy wireless assets of troubled telecoms carrier Reliance Communications, run by Mukesh's younger brother Anil Ambani, which analysts expect will help lower its costs.

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