India: Essar Oil Limited Reports Strong Financial Performance

Essar Oil Ltd (EOL) today reported revenues of Rs 13,809 crore for the quarter ended 31 December 2010, an increase of 21 percent compared to the corresponding quarter in the last financial year. Revenues were boosted by higher crude prices and the refinery’s record throughput.

At Rs 827 crore, EBITDA grew by more than 263 percent over the corresponding quarter last year. This growth can be attributed to increased GRMs (Gross Refining Margins).

All these factors helped the company register a PAT (Profit After Tax) of Rs 273 crore, against a loss of Rs 226 crore in the corresponding quarter last fiscal.

EOL’s Current Price GRM was US$ 7.21 per barrel, boosted by a strengthening of refining margins in this quarter.

Performance for 9-month ended 31 December 2010

For the 9-month ended 31 December 2010, EOL’s revenues were Rs 38,273 crore, registering a growth of over 26%, compared to Rs 30,460 crore in the 9-month ended 31 December 2009. At Rs 1,868 crore, EBITDA grew by more than 49 percent, compared to Rs1,255 crore previously. Additionally PAT grew to Rs 333 crore, against a previous loss of Rs 150 crore.

Speaking on the results, Mr. Naresh Nayyar, Managing Director, EOL said, “I am delighted to report strong financial and operating performance for Essar Oil in the last quarter. This has been driven by increased refinery throughput and a recovery in global oil demand, which has led to an improvement in refining margins. We will take a 35-day shutdown in May-June 2011 to complete the tie-ins for the new units of our 18 MMTPA expansion project. The project to further enhance our refinery capacity to 20 MMTPA is on track.”

As announced earlier, Essar Oil’s parent company, Essar Energy plc, which was listed at the London Stock Exchange and had successfully raised USD 1.95 billion through an Initial Public Offer in May 2010, has already infused about USD 500 million through equity or FCCBs (Foreign Currency Convertible Bonds) in EOL.

About Essar Oil

Essar Oil is a fully integrated oil & gas company of international scale with strong presence across the hydrocarbon value chain from exploration & production to oil retail. It has a global portfolio of onshore and offshore oil & gas blocks, with about 45,000 sq km available for exploration. Essar Oil has over 300,000 bpsd (barrels per stream-day) of crude refining capacity that is being expanded to 405,000 bpsd. There are over 1,300 Essar-branded oil retail outlets in various parts of India.

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Source: Essar, January  17, 2011;