Essar Oil......profit zooms 27 times

Essar Oil operating profit zooms 27 times

Published: Saturday, Nov 10, 2012, 7:26 IST 
By Promit Mukherjee | Place: Mumbai | Agency: DNA

Essar Oil, the flagship oil and gas business of Essar Group, reported a 27-time jump in its operating profit for the quarter ended September, riding on a 66% jump in refinery throughput and a four-fold increase in processing ultra-heavy crude.

The ability to process ultra-heavy crude indicates its refinery has a higher complexity. This allows it to purchase and process low-quality crude, which costs less, and produce refined products such as petrol, diesel, and kerosene, to be sold at market-linked prices.“With the completion of our optimisation programme at Vadinar, we were able to post a throughput of 5.07 million metric tonne,” said L K Gupta, managing director and chief operating officer, Essar Oil.

He said the refinery has reached its full capacity of 20 million tonne per annum and the impact has started to reflect from the last quarter, with revenues rising.Also, as the refinery’s Nelson complexity (a measure of its ability to process low-quality crude) has increased, the company was also able to produce middle and light distillates, essentially high-premium petroleum products, which bring in higher margins, reflecting in higher earnings before interest, tax depreciation and amortisation (Ebitda). Gross revenue for the quarter stood at Rs23,023 crore, up 67% on year, while Ebitda was up 27 times at Rs1,169 crore compared with Rs43 crore (post sales tax impact).Profit after tax was at Rs105 crore as against a loss of Rs419 crore (post sales tax impact) in the same period last year after.The company also posted a gross refining margin of $7.86 per barrel, up 55% compared with $5.07 per barrel (without sales tax incentive) in Q2FY12, which was one of its highest in the last several quarters.

http://www.dnaindia.com/money/report_essar-oil-operating-profit-zooms-27-times_1762802