Essar Oil Posts Strong Q4FY14 Results

Essar oil reported its results for the quarter ended March’14. The company posted a fivefold increase in its PAT which stood at Rs.1008 crore in quarter ended March 2014 as against Rs. 200 crore in quarter ended March 2013. This was mainly attributed to forex gains for the quarter appreciation in rupee, said Mr. L.K.Gupta, MD & CEO, Essar Oil. Moreover, the company incurred a loss of Rs. 1180 crore in December 2013 whereas in the January–March quarter, it posted a net profit of Rs. 126 crore.

On the sale revenue front, gross revenues stood at Rs. 27691 crore against Rs. 25757 crore in Q4FY13. Throughput for the quarter was at 5.05 MMT with refinery consistently operating above its rated capacity. EBITDA for Q4FY14 stood at Rs 2053 crore against Rs 1556 crore in Q4FY13.

The Gross refining margins (GRM) improved to $ 10.12 from $ 9.06 per barrel on a quarterly basis. GRM is the cost required to convert every barrel of crude oil into fuel. Forex gain stood at Rs. 200 crore in March’14 v/s Rs. 25 crore in the December’13 quarter.

During the quarter, Essar Oil realized 66% of its revenues from the domestic market, against 58% and 44% in the immediate past two quarters, on account of improved domestic demand for gas oil.

Retail sales of gasoline (petrol) have also begun to show a healthy rising trend, with retail marketing accounting for 2% of the company’s total sales. Essar Oil has about 1,400 retail outlets across the nation, with over 300 in various stages of commissioning. The company is reviewing its retail strategy to tap the growing gasoline demand by additionally targeting city centres for new outlets.

As on the exploration & production front, its flagship Raniganj CBM block, the current gas production is around 190,000 standard cubic metres per day (scm/d), which is being sold locally through pipeline and cascades. It has drilled 183 wells, of which 151 are producing. The company has laid pipelines of 48 kms and 30 kms to Durgapur Industrial Area and Matix respectively. Three Gas Gathering Stations (GGS) are complete and one more is under construction. All approvals are in place for drilling program.

Essar oil CFO, Mr. Suresh Jain said that the company has crossed a turnover of one lakh crorr and has become one of India’s top 10 Indian oil companies by top line in a very short period of time of beginning operations (5 years). The company has been operationally efficient leading to higher GRMs and will be committed to be efficient operationally. The total debt stands at Rs 19109 crore as against Rs 21175 crore on a yearly basis.

The Vadinar refinery operates at a capacity of 20 million metric ton per annum and is amongst the most complex single site refineries in the world. It is also utilizing its 100% capacity. The company now has 1400 retail outlets and plans to expand with 300 more retail pump stations.