Essar Oil UK posts five times jump in profit at Rs 1,217 cr

EBITDA was a record Rs 2,067.2 cr for a nine-month period

Essar Oil (UK) Limited, which owns and operates the Stanlow Refinery, announced record earnings for the first nine months of for the year ending March 31st 2016.

In the nine months to December 31st, 2015, Stanlow, which produces about 15% of the UK's road transport fuel demand, processed 6.77 million metric tonnes (MMT) of crude, a 7% increase on the previous year's 6.35 MMT.

Profit after Tax (PAT) was its highest ever at Rs 1,217.2 crore against Rs 240 crore in FY15.

Gross revenues for the period stood at Rs 27,478.8 crore, a 35% drop to the Rs 4,2547.6 crore reported in FY15, largely due to the lower crude oil price which fell 52% year on year average.

EBITDA (earnings before interest, taxes, depreciation and amortisation) was a record Rs 2,067.2 crore for a nine-month period, against Rs 861.5 crore reported in FY15.

Essar Oil UK reported its best ever gross refining margin at $10.1 per barrel, a 20% increase to the $8.4 per barrel reported in FY15, primarily due to refinery reconfiguration and improved benchmark margins.

Stanlow again saw the benefits of operating as an optimised single train site, which has increased the yield of high margin products such as gasoline and middle distillates and also reduced production of lower margin products such as fuel oil and naphtha.

Essar entered the UK retail market, with its first and second Essar branded service stations opening in Coalville, Leicestershire and Walkden, Manchester respectively. A third site in Middleton, Lancashire was unveiled in January 2016.

Essar Oil UK Executive Chairman, Naresh Nayyar, said: "This is a strong performance which reflected the many margin improvement projects undertaken by Essar at Stanlow. We are seeing the benefits of running as a single train optimised site, with robust operational delivery enabling us to take advantage of a supportive market environment."