Essar Oil's net profit slumps 73% to Rs 180 crore

Ruias-promoted Essar Oil Ltd’s fourth-quarter net profit plunged 72.7 per cent to Rs 180 crore, from Rs 660 crore in the corresponding previous quarter.

“We saw refining margins bottoming out in the last quarter. With the margins improving this quarter, we are hopeful that the refining business is gradually coming out of the doldrums,” said Naresh Nayyar, managing director of Essar Oil Ltd (EOL), in a media statement.

“In India, the demand for gasoline is growing at approximately 14 per cent and diesel at 9 per cent. This is expected to have a positive impact on our bottom line.”

For the financial year ended March 2010, EOL reported net profit of Rs 29 crore, against net loss of Rs 514 crore in the previous one. The results for 2009-10, however, are not comparable with those of the previous year, as the company began commercial production from its Vadinar refinery in Gujarat’s Jamnagar district, with effect from May 2008.

EOL also announced that its Vadinar refinery expansion plans were on track, with financial closure achieved for the project. “The company is on track with its March 2011 mechanical commissioning target for the 18-mt (million tonnes) per annum expansion project. It has also received an equity contribution of Rs 2,000 crore from promoters and has tied up the entire Rs 4,600-crore of debt for expansion of the refinery,” the statement added.

The company said the sale of CBM gas from its Raniganj block was expected soon.