UPDATE:Reliance Indus 4Q Net Down 9.4% On Lower Crude Prices

MUMBAI (Dow Jones)--Indian conglomerate Reliance Industries Ltd. (500325.BY) Thursday posted a 9.4% decline in quarterly net profit, as global crude prices fell hurting product prices and refining margins.

Profit also took a hit from a one-time charge of INR3.70 billion toward claims from subsidiaries, India's biggest company by market value said in a statement to the Bombay Stock Exchange. A company spokesman declined to elaborate on the claims.

Fourth-quarter profit slid to INR35.46 billion from INR39.12 billion a year earlier. That lagged behind the INR36.46 billion average of estimates in a Dow Jones Newswires poll of eight analysts.

Sales fell 24% to INR283.62 billion.

Reliance agreed to buy crude at high prices last summer on expectations of a continued surge in demand. Since then a sharp fall in prices due to the global economic turmoil meant cargoes were worth much less when they were delivered.

"The Indian basket of crude was at an average of $44.9 a barrel during the fourth quarter of 2008-09, compared with $54.5 a barrel a quarter earlier," Deepak Pareek, analyst at Angel Broking Ltd. said in a recent note.

The fall in crude prices resulted in lower prices for refined products, leading to inventory losses, the company said.

Quarterly revenue from the key refining business fell 25% during the quarter to INR216.31 billion from INR286.86 billion.

Revenue from petrochemicals, which account for third of its revenue, fell 31% to INR97.24 billion.

"Our operating performance with earnings growth is creditable in a year of extraordinary challenges of price volatility and demand reduction," said Mukesh Ambani, Reliance's chairman.

Reliance paid INR123.84 billion to buy raw materials such as crude oil and naphtha in the fourth quarter, down 52% from a year earlier.

Gross margin from refining a barrel of crude fell to $9.9 a barrel in the fourth quarter from $15.5 a barrel a year earlier because of a decline in average crude prices. Gross refining margin was $10 a barrel in the third quarter.

The quarterly earnings don't include the impact of Reliance Petroleum Ltd.'s (532743.BY) merger with Reliance Industries announced March 2. Once it gets the necessary approvals, the merger will retroactively come into effect as of April 1, 2008. LINK...