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RIL earns net profit of Rs 16.53 bn, okays 35 pc dividend

Reliance Industries Limited today announced its audited results for the year ended March 31, 1998, by posting sales of Rs 134.04 billion (US $ 3,394 million) and net profit of Rs 16.53 billion (US $ 418 million). The directors of the company have recommended a dividend of 35 per cent per annum (70 per cent adjusted for bonus as against 65 per cent for previous year) for the year, constituting a dividend payout of Rs 3.27 billion (US $ 83 million).

The sales for the year ended March 31, 1998 was Rs 134.04 billion (US $ 3,394 million) against Rs 87.30 billion (US $ 2,431 million) for the previous period, an increase of 54 per cent.

Operating profit -- PBDIT -- for the year increased by 48 per cent, to Rs 28.87 billion (US $ 731 million) as against Rs 19.48 billion (US $ 542 million) for the previous period.

Cash profit increased to Rs 23.83 billion (US $ 603 million) against Rs 17.78 billion (US $ 495 million) for the previous period, an increase of 34 per cent.

Net profit was Rs 16.53 billion (US $ 418 million) against Rs 13.23 billion (US $ 368 million) for the previous period, an increase of 25 per cent.

The total equity share capital increased to Rs 9.34 billion (US $ 236 million) from Rs 4.60 billion (US $ 128 million) as a result of 1:1 bonus issued in 1997 and partial conversion of over 42 per cent of outstanding Euro-convertible bonds.

Commenting on the results, Anil D Ambani, managing director of Reliance Industries Ltd, said, "We were enthused by the strong performance in possibly the most challenging times faced by the global petrochemical industry in the recent past, especially in the context of the Asian economic crisis."

Reliance enhanced its overall market leadership position by achieving a significant volume growth in production, from 1.8 million tonnes to nearly 5.2 million tonnes, and marketing the expanded production almost entirely into the highly competitive domestic Indian market, he said.

Reliance achieved its overall financial performance from strong revenue growth and stability of operating margins, and due to its sustained globally competitive cost positions, its single-minded focus on productivity and efficiency, and its conservative financial policies. All this has been possible only due to the strong commitment, team work and dedication of all its people.

The company proposes to give quarterly results beginning financial year 1998-99. For the first quarter ending June 30, 1998, the company expects to announce its results in the third week of July.

Reliance is the first and only Indian private sector company to set new corporate landmarks and achieve sales of Rs 134.04 billion (US $ 3,394 million), operating profit of Rs 28.87 billion (US $ 731 million), cash profit of Rs 23.83 billion (US $ 603 million), net profit of Rs 16.53 billion (US $ 418 million), and create total assets worth Rs 243.88 billion (US $ 6,175 million) -- all new corporate records.

The company had set a target of achieving 20 pc compounded growth in Earnings Per Share (EPS) over the next five years -- the company achieved 22 pc growth in EPS for 1997-98. Adjusted for bonus, compounded annual EPS growth over the last five years is 22 pc.

The company had set a target of achieving 20 pc return on shareholders' funds over the next five years -- the company has achieved 21 pc, adjusted for revaluation reserves.

The company has aimed at regularly increasing the dividend rate with dividend pay-out ratio of around 25 pc. "We have increased dividend rate from 32.5 pc (adjusted for 1:1 bonus) to 35 pc."

The company already has the necessary shareholders' approval relating to share buy-back and employee stock option programme and will implement the same at an opportune time, on appropriate laws being enacted.

The company's production increase from 1.8 million tonnes per annum during 1996-97 to nearly 5.2 million tonnes during 1997-98 -- nearly three times, representing a 182 pc growth.

Total exports including deemed exports increased more than four times to Rs 3.66 billion (US $ 93 million) as against Rs 1.07 billion (US $ 30 million) for the previous period.

Over the year, the company's share price increased by 38 pc to Rs 176.9 per share (US $ 4.5 per share) as on March 31, 1998, as against Rs 128.4 per share (US $ 3.6 per share) as on March 31, 1997 whereas the Bombay Stock Exchange's Sensex increased by 16 pc to 3892. Thus, Reliance's share price outperformed the sensitive index by 2.4 times.

As on March 31, 1998, the company's market capitalisation stood at Rs 165.18 billion (US $ 4,182 million) as against Rs 118.20 billion (US $ 3,291 million), an increase of 40 pc.

UNI

EXTERNAL LINK:
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Anil Ambani's investor presentation will be cybercast live on Tuesday, April 28, 2000 hours IST on www.ril.com