RIL posts 13.5% rise in Q3 profit

Tuesday 21st January 2020 14:25 EST
 

Reliance Industries (RIL) reported a 13.5% rise in profit in the third quarter of fiscal 2020 to £1.16 billion, benefiting from higher price realisations in its refining, retail, media and digital services businesses. The company’s revenue in the December quarter, however, fell 1.4% to £16.8 billion due to an 11% decline in its traditional petrochemicals and refining businesses and a 7% fall in Brent crude price. Operating profit in petrochemicals, the biggest contributor to RIL’s earnings, declined 29% to £588 million due to inventory overhang and global demand slowdown. On the other hand, refining, the second-largest contributor to RIL’s profit, increased 12% to £565.7 million because of better margins. RIL’s Jamnagar refinery earned $9.2 from every barrel of crude it processed, higher than $8.8 it earned in the third quarter of fiscal 2019. Retail, media and digital services (Reliance Jio) zoomed 58%, 309% and 63% to £238.9 million, £23.7 million and £385.7 million respectively. RIL chairman Mukesh Ambani said the results of the energy business reflects the weak global economic environment and volatility in the energy market. He added that RIL’s consumer businesses continue to establish new milestones every quarter.

Tatas, two investors to buy 49% in GMR Airports

A consortium of Tata Group and two financial investors will now buy 49% in GMR Airports, operator of the Delhi airport which is the largest in the country, instead of 44.4% as proposed earlier. In March 2019, the consortium had planned to invest £800 million for a 44.4% stake in GMR Airports. But the deal ran into regulatory hurdles as rules do not allow a corporate owning an airline to have more than 10% in an airport. Tatas, which runs two airlines - Vistara and AirAsia India - in the country, was to own 19.7% in GMR Airports, while the two investors - GIC and SSG Capital - were to hold 14.8% and 9.9%. Competitors of Tata’s domestic airlines had opposed its foray into the airport sector on carrier ownership grounds. The increased stake purchase of 49% will now see Tata’s share in GMR Airports coming down in a bid to comply with the rules. The two investors’ shares will go up in GMR Airports, which runs Asia’s sixth biggest airport at Delhi as well as the Hyderabad airport. GIC will become the largest shareholder in the consortium.

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Air India can’t move engine due to GST dues

Air India, which is yet to pay December salary, awaits the outcome of the government’s second move to sell it off. The airline has almost completely run out of funds and is now struggling to keep flying in the absence of equity infusion this fiscal. One of AI’s Airbus has been grounded in Vadodara for almost a week as its requires engine replacement. The Maharaja has a spare engine for this single aisle aircraft in Delhi but is unable to send it as it can’t raise the e-way bill because of GST dues. “Our GST dues are about £10 million and because of that the paperwork required to send the engine to Vadodara is not being done,” said a senior official. The airline hopes to pay the GST dues, along with salary to employees. “We have raised the cash to pay for these things from our ticket sales. Hopefully we will be able to send the engine to Vadodara once some GST dues are paid and then we raise the e-way bill required for that shipment,” said the official.

Wipro arm sets up 2nd venture fund

Wipro Ventures, the strategic investment arm of Wipro, has launched a second fund with a $150-million corpus, signalling a growing appetite to invest in early to midstage companies that complement its businesses. Wipro chairman Rishad Premji is credited with setting up the first $100-million fund in 2015 to back startups developing cutting-edge solutions across key areas like cybersecurity, application development, analytics, cloud infrastructure, test automation and AI. “Wipro Ventures has become an integral part of our innovation ecosystem,” said Wipro CEO Abidali Neemuchwala. “Our strategy has been to invest in promising enterprise software startups, establish strategic partnerships with them and bring their leading-edge solutions to our customers. By doing this, we differentiate our customer services, generate revenue for our portfolio companies and deliver strategic as well as financial returns to Wipro.”


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