Reliance Industries : Q1 (FY 2019-20) Financial and Operational Performance of Reliance Industries Limited (RIL)

Mumbai, 19th July 2019

RECORD QUARTERLY CONSOLIDATED REVENUE OF ` 172,956 CRORE ($ 25.1 BILLION), UP 22.1 %

RECORD QUARTERLY STANDALONE NET PROFIT OF ` 9,036 CRORE ($ 1.3 BILLION), UP 2.4 %

RECORD QUARTERLY REVENUE AND EBITDA FOR RETAIL AND DIGITAL SERVICES

Reliance Industries Limited (RIL) today reported its financial performance for the quarter ended 30th June, 2019. Highlights of the unaudited financial results as compared to the previous periods are:

CONSOLIDATED FINANCIAL PERFORMANCE

	1Q	4Q	1Q	% chg.	% chg.
(In ` Crore)	FY20	FY19	FY19	w.r.t.	w.r.t.
				4Q FY19	1Q FY19
Revenue	172,956	154,110	141,699	12.2%	22.1%
PBDIT	24,486	24,047	22,449	1.8%	9.1%
Net Profit*	10,104	10,362	9,459	(2.5%)	6.8%
EPS (`)	17.1	17.5	16.0	(2.5%)	6.8%

*after minority interest

HIGHLIGHTS OF QUARTER'S PERFORMANCE (CONSOLIDATED)

• Revenue increased by 22.1% to ` 172,956 crore ($ 25.1 billion)
• PBDIT increased by 9.1% to ` 24,486 crore ($ 3.5 billion)
• Profit Before Tax increased by 4.7% to ` 14,366 crore ($ 2.1 billion)
• Cash Profit increased by 1.8% to ` 16,184 crore ($ 2.3 billion)
• Net Profit increased by 6.8% to ` 10,104 crore ($ 1.5 billion)

Registered Office:	Corporate Communications	Telephone	: ([phone]
Maker Chambers IV	Maker Chambers IV	Telefax	: ([phone]
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Mumbai 400 021, India	Mumbai 400 021, India	CIN	:	L17110MH1973PLC019786

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HIGHLIGHTS OF QUARTER'S PERFORMANCE (STANDALONE)

• Revenue decreased by 3.0% to ` 96,384 crore ($ 14.0 billion)
• Exports decreased by 4.5% to ` 50,158 crore ($ 7.3 billion)
• PBDIT decreased by 1.4% to ` 16,985 crore ($ 2.5 billion)
• Profit Before Tax decreased by 1.7% to ` 12,109 crore ($ 1.8 billion)
• Cash Profit decreased by 5.9% to ` 11,842 crore ($ 1.7 billion)
• Net Profit increased by 2.4% to ` 9,036 crore ($ 1.3 billion)
• Gross Refining Margin (GRM) of $ 8.1/bbl for the quarter

CORPORATE HIGHLIGHTS FOR THE QUARTER (1Q FY20)

• Reliance Industries Limited (RIL) and BP announced the sanction of the MJ project (also known as D55) in Block KG D6, offshore the east coast of India. MJ is the third of three new projects in the Block KG D6 integrated development plan and its approval follows sanctions for the development of 'R-Series'deep-water gas field in June 2017 and for the Satellites cluster in April 2018. Together the three projects are expected to develop a total of about 3 trillion cubic feet (tcf) of discovered gas resources with a total investment of circa ` 35,000 crore (US$5 billion). These projects together, when fully developed, will bring about 1 billion cubic feet a day of new domestic gas onstream, phased over 2020-2022.
• Reliance Ethane Holding Pte. Ltd. ("REHPL") {incorporated in Singapore, a wholly owned subsidiary of Reliance Industries Limited ("RIL"), having 100% holding in six limited liability companies (LLCs) which own Very Large Ethane Carriers ("VLEC" or the "Vessel")}, Mitsui O.S.K
  Lines Ltd. ("MOL") of Japan and a strategic minority investor signed binding definitive agreements for a strategic investment by MOL and minority investor in the six special purpose limited liability companies ("SPVs"), each owning a VLEC. MOL and the strategic minority investor have completed their strategic investment in the SPVs.
• Reliance Brands Limited (RBL), a subsidiary of the Company, completed the acquisition of 100% stake of Hamleys Global Holdings Limited (HGHL), through a special purpose vehicle company

Registered Office:	Corporate Communications	Telephone	: ([phone]
Maker Chambers IV	Maker Chambers IV	Telefax	: ([phone]
3rd Floor, 222, Nariman Point	9th Floor, Nariman Point	Internet	:	www.ril.com
Mumbai 400 021, India	Mumbai 400 021, India	CIN	:	L17110MH1973PLC019786

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set up in United Kingdom for a cash consideration of GBP 67.96 million. This acquisition will establish RBL as a major player in the global toy retail industry.

BACKDROP AND KEY OPERATING HIGHLIGHTS:

Operating environment for both downstream businesses, refining and petrochemicals, has been challenging for the previous six quarters. 1Q FY20 was particularly tougher with geopolitical pressures exacerbating crude markets. New supplies, global economic slowdown and trade tensions weighed on product prices and margins.

Reliance's business model enables it to deliver industry leading profitability despite macro headwinds. Its unique business architecture captures margins within and across hydrocarbon product chain. This is further boosted through appropriate choice of technology, robust automation and world-scale operations which gives Reliance among the best cost positions across its product portfolio. During this quarter, efficient crude and feedstock sourcing, optimizing product yields and maximizing margin capture through chain integration helped Reliance's downstream businesses deliver resilient performance with near flat EBITDA on Q-o-Q basis.

Despite a slowdown in the FMCG and consumer sector, Reliance Retail continues to grow faster than every other player. Reliance Retail maintained strong growth momentum through expansion across geographies, formats and verticals, reflecting in revenue growth of 48% YoY and EBITDA growth of 70% YoY. Reliance's growth has been aided by optimum customer value proposition and deep insights into consumer preferences which drives appropriate segmentation and targeting strategy. During the quarter, Reliance Retail crossed the milestone of 100 million register customers and 150 million footfalls, establishing its position as the most preferred retailer in India. Customer centric approach, sourcing and operating cost advantage and benefit of operating leverage helped Reliance Retail deliver record EBITDA for the quarter.

Reliance Jio maintained strong momentum in subscriber addition with gross adds of 33.8 million during the quarter. This translated into revenue and EBITDA growth of 44% and 49% respectively. Despite larger consumer base across varying tariff plans, customer engagement continues to

Registered Office:	Corporate Communications	Telephone	: ([phone]
Maker Chambers IV	Maker Chambers IV	Telefax	: ([phone]
3rd Floor, 222, Nariman Point	9th Floor, Nariman Point	Internet	:	www.ril.com
Mumbai 400 021, India	Mumbai 400 021, India	CIN	:	L17110MH1973PLC019786

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improve with higher data usage of 11.4 GB/user/month. VoLTE voice consumption per subscriber per month stands at 821 minutes.

Reliance has entered into an agreement with Brookfield for investment of ₹ 25,215 crore in the Tower Infrastructure Trust. This is the single largest foreign investment in an Indian infrastructure vehicle and is a testimony from one of the largest infrastructure players globally, for the quality of assets created by Jio.

This is also a significant step forward in optimizing the capital structure of the digital and infrastructure businesses. The transaction validates the value unlocked through spin-off of passive infrastructure assets of Jio through the InVIT structure.

Consumer businesses now contributes 32% of the consolidated segment EBITDA for the quarter.

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance

Industries Limited said: "Our first quarter earnings were strong despite weak global macroeconomic environment and challenging hydrocarbon market conditions. Our downstream businesses delivered resilient performance in an environment of slower demand growth and incremental supplies. The performance reflects the benefits of deep refining and petrochemicals integration, chain economics and feedstock flexibility. The Company continues to make major strides in its retail and digital services businesses led by focus on growth markets with offerings in the right product segments and compelling value proposition. We are pleased with the robust growth both in revenues and operating income for Reliance Retail. Our digital services business continues to transform the mobility market in India while scaling newer milestones."

Registered Office:	Corporate Communications	Telephone	: ([phone]
Maker Chambers IV	Maker Chambers IV	Telefax	: ([phone]
3rd Floor, 222, Nariman Point	9th Floor, Nariman Point	Internet	:	www.ril.com
Mumbai 400 021, India	Mumbai 400 021, India	CIN	:	L17110MH1973PLC019786

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1Q FY 2019-20:FINANCIAL PERFORMANCE REVIEW AND ANALYSIS (CONSOLIDATED)

For the quarter ended 30th June, 2019, RIL achieved revenue of ` 172,956 crore ($ 25.1 billion), an increase of 22.1% as compared to ` 141,699 crore in the corresponding period of the previous year. Growth in revenue was led by sharp increase in revenue from Digital Services and Retail business, which recorded an increase of 55% YoY and 48% YoY respectively. Higher refinery throughput on YoY basis, contributed to the increase in revenue for the Refining business.

Exports (including deemed exports) from RIL's India operations were lower by 4.5% at ` 50,158 crore ($ 7.3 billion) as against ` 52,501 crore in the corresponding period of the previous year. Lower price realization across petrochemicals and refining products, led by 7.4% YoY decrease in Brent oil price, and lower volumes of fibre intermediates contributed to the decline in exports.

Other expenses increased by 47.7% to ` 22,370 crore ($ 3.2 billion) as against ` 15,143 crore in corresponding period of the previous year mainly on account of higher network operating expenses, increase in lease rent, regulatory charges, and due to inclusion of expenses of Hathway Cable & Datacom Limited and Den Networks Limited.

Segment EBITDA increased by 5.0% to ` 22,013 crore ($ 3.2 billion) from ` 20,957 crore in the corresponding period of the previous year. This increase was led by strong operating performance in retail and digital services business. Higher contribution from consumer businesses more than offset weakness in refining and petrochemicals businesses.

Depreciation (including depletion and amortization) was ` 5,011 crore ($ 726 million) as compared to

• 5,173 crore in corresponding period of the previous year.

Finance costs was at ` 5,109 crore ($ 740 million) as against ` 3,550 crore in corresponding period of the previous year. This increase is primarily on account of higher loan balances and lower interest capitalization.

Profit after tax was higher by 6.8% at ` 10,104 crore ($ 1.5 billion) as against ` 9,459 crore in the corresponding period of the previous year.

Registered Office:	Corporate Communications	Telephone	: ([phone]
Maker Chambers IV	Maker Chambers IV	Telefax	: ([phone]
3rd Floor, 222, Nariman Point	9th Floor, Nariman Point	Internet	:	www.ril.com
Mumbai 400 021, India	Mumbai 400 021, India	CIN	:	L17110MH1973PLC019786

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