Reliance Q3 net falls but beats f'cast

India's largest listed company, Reliance Industries Ltd (RELIANCE.NS : 1136.3 +16.45), said its quarterly earnings fell 9.8 percent from a restated year-ago profit, its first drop in three years, but beat forecasts as refining margin eased less than expected.

"This was one of the most challenging quarters for Reliance with volatility in prices and margins," Chairman and Managing Director Mukesh Ambani said in a statement on Thursday.

"Producers and consumers are coming to terms with slower global trade and economic outlook," he said.

Reliance, India's largest petrochemical producer and refiner, is set to get a boost when it starts pumping 30-40 million cubic metres of natural gas a day from its deep-sea fields off India's east coast in the second half of February.

Another driver would be sales from the newly commissioned 580,000 barrels per day refinery which is run by subsidiary Reliance Petroleum.

Reliance Industries said net profit fell to 35.01 billion rupees ($713 million) in its fiscal third quarter ended Dec. 31 from a restated 38.82 billion rupees excluding one-off gains a year earlier.

A Reuters poll had forecast a net profit of 30.98 billion rupees.

Refining margins, a key measure of profitability, dropped to $10 per barrel from $15.4 a barrel a year ago, against market expectations of $9.16 as sluggish demand in the wake of global economic slowdown pushed oil prices sharply lower.

Reliance's refining margins are significantly higher than the Asian benchmark in Dubai as its refinery can process cheaper heavy crude to produce high value products.

Crude oil prices plunged more than $100 from its peak of $147 barrel in July, to $44.60 at the end of December.

Reliance's retail fuel pumps in the country are shut as it awaits fair competition. India subsidises state-run oil companies to enable them to sell fuels at heavily discounted, government-set rates but private firms get no such assistance.

Last week, P. Raghavendran, president of the company's refinery business, said Reliance would reopen its fuel pumps "once we see a reasonable period of stability when we don't have to shut down again. It depends on when the government comes out with a clear policy and international prices stabilise".

Rival Oil & Natural Gas Corp is set to report a second consecutive fall in quarterly net profit due to lower crude prices, and its outlook is weighed down by falling output and its costly acquisition of UK-listed Imperial Energy.

Earlier on Thursday, South Korea's top refiner SK Energy posted a weaker-than-expected 45 percent rise in fourth-quarter core profit, on reduced demand for petrochemical products.

Ahead of the results, shares in Reliance, which has a market value of around $36 billion, closed up 1.21 percent at 1,132.95 rupees in a Mumbai market that rose 0.4 percent.

The stock fell 37 percent in the December quarter, more than a 25 percent drop in the benchmark index and 33 percent loss in the sector index.