Essar Indian arm flexes record annual earnings

Essar Energy's Indian subsidiary Essar Oil lifted earnings more than threefold in the fourth quarter of the year as it posted its highest ever annual figures.

Essar Energy's Indian subsidiary Essar Oil lifted earnings more than threefold in the fourth quarter of the year as it posted its highest ever annual figures.

The 87%-owned subsidiary reported record results for the year to end-March with revenues up 53% to Rs 96,797 crore from Rs 63,340 crore the year before.

Earnings before interest, depreciation, tax and amortisation ballooned 213% to Rs 3,651 crore from Rs 1,167 crore in 2012.

The Mumbai-headquartered company reported that its current price gross refining margin in the fourth quarter was almost double the rate of the equivalent period a year before, at $9.06 a barrel, which reflected the higher complexity benefits post completion of expansion and optimization projects.

Chief Executive Officer LK Gupta said the company had completed a very eventful year, during which its Vadinar Refinery was expanded to 20m metric tonnes per annum capacity, making it the second largest single site refinery in India.

"The refinery has demonstrated excellent operating performance with a very strong focus on safety and has consistently outperformed the benchmark IEA margins, as was targeted."

Chief Financial Officer Suresh Jain added: "Benefit of expanded capacity and complexity was available for only three quarters of the year and the performance of the refinery post completion of expansion has been consistent.

"Our primary focus is now to align our asset liability mismatch by dollarizing our debt, which will also lower our interest cost, and in turn improve our free cashflows significantly."

Gupta later told reporters that the company intended to complete a refinancing of $1.8bn of its debt from rupees to dollars in the next three to six months.

OH

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