FOCUS-Reliance Q1 profits up 16 pct, seen slowing
By Anantharaman Muralikumar
BOMBAY, July 8 (Reuters) - Indian petrochemicals giant Reliance Industries Ltd (http://www.ril.com/) on Thursday unveiled a 16 percent rise in profits in the first quarter of 1999/2000 (April-March), but cautioned growth for the year may slow.
''Based on present market trends we believe that the current momentum in earnings growth is unlikely to be sustained over the balance of the financial year,'' managing director Anil Ambani said in a statement.
Reliance's net profit rose to 5.10 billion rupees ($118 million) in the three months ended June 30 from 4.41 billion in the same period last year. Sales grew to 38.37 billion rupees in the first quarter from 36.45 billion.
Product prices had improved sharply in the first quarter due to stronger demand in the Asia Pacific region and capacity outages in the global petrochemicals industry, he said.
''This recovery has already shown signs of weakening,'' Ambani said.
The warning knocked Reliance shares down 3.35 rupees to 181.60 in afternoon trade on the Bombay Stock Exchange.
''The figures more or less meet expectations,'' said Sonal Jain, petrochemicals analyst at ABN AMRO Asia Equities (India).
''In the second quarter we see the same trend continuing. There may be some upside on account of additional capacity of 0.4 million tonnes of polypropylene coming on stream.''
A Reuters poll last month forecast earnings up an average 16.3 percent to 5.13 billion rupees in the first quarter.
Reliance is India's largest private sector firm. It makes a wide range of polymers, polyesters and textiles. It also produces oil and gas through a joint venture.
Production of polyesters, comprising polyester filament yarn, polyester staple fibre and polyethylene terephthalate, rose 10 percent to 157,000 tonnes during the first quarter, it said.
The output of fibre intermediates, comprising purified terepthalic acid and monoethylene glycol, grew 13 percent to 359,000 tonnes in the quarter compared to the year-ago period.
Production of polymers, comprising polypropylene (PP), polyethylene (PE) and polyvinyl chloride, rose 13 percent to 293,000 tonnes in the period.
''Oil and gas production from Panna-Mukta-Tapti (in India's western coast) oil and gas fields recorded impressive growth,'' Reliance said in a statement.
''Oil production increased from 64,000 tonnes to 85,000 tonnes, a growth of 31 percent. Gas production increased by 36 percent from 5.6 to 7.6 million cubic metres per day,'' it said.
Reliance has a joint venture with Enron Oil & Gas (NYSE:EOG - news) of U.S. and India's state-run Oil and Natural Gas Corporation to develop oil and gas on the western coast. ($=43.4 rupees)
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