Essar Energy posts earnings drop, down 10%

India-focused refiner and power generator Essar Energy said core earnings fell 10% in 2011, falling short of analyst forecasts due to weaker refining margins and depreciation of the rupee in the second half of the year.

The company posted full-year earnings before interest, tax, depreciation and amortisation (EBITDA) of $624.8 million. That compared with $696.5 million in 2010 and the $685 million average of 10 analysts' forecasts supplied by the company.

Essar Energy -- 77%-owned by privately-held Indian conglomerate Essar Group -- is the majority shareholder in India-listed Essar Oil which is currently seeking a review of an Indian court ruling against it over a deferred payment of sales tax.

Shares in Essar, which are worth less than a third of the value of their listing price in 2010 and have fallen by 41% in the last three months, closed at 126 pence on Friday, valuing the company at about 1.6 billion pounds.