Essar Oil posts seven times jump in Q3 net at Rs.364 crore

India's second largest private refiner, Essar Oil, on Tuesday reported a seven-fold rise in net profit for the third quarter ending December 31, 2015, at Rs.364 crore, compared to Rs.52 crore in the same period a year ago, on the back of record refining margins.

The company said in a statement here that in the quarter in question it earned $13.25 on turning every barrel of crude oil into fuel, as compared to a gross refining margin (GRM) of $7 per barrel in the same period a year ago.

However, with international crude oil prices plunging to sub-$30 a barrel levels, the company's total revenues in the third quarter declined 37 percent to Rs.13,947 crore.

Essar Oil's Vadinar refinery in Gujarat processed 4.24 million tonnes of crude oil in the quarter, down 18 percent from 5.19 million tonnes in the corresponding quarter a year ago.

"The decline in throughput was due to the planned shutdown of 30 days (completed in 28 days from September 18, 2015 to October 15, 2015)," the statement said.

Retail business contribution in overall revenue improved to 16 percent during the third quarter, compared to 6 percent in the same quarter of the previous fiscal.

Managing director and CEO Lalit Kumar Gupta said: "Essar Oil has delivered excellent performance despite very challenging domestic and global macro-economic environment."

Chief financial officer Suresh Jain said profitability is further expected to improve pursuant to overall improvement in crude mix and product slate post the maintenance shutdown.

During the quarter in consideration, Essar Oil commissioned 220 new petrol pumps to take the total strength to 1,910 outlets nationwide.

"As many as 2,186 outlets are at different stages of implementation," the company said.

Retail sales volumes during the quarter under consideration grew 87 percent to 448 kilolitres from 239 kl in the same period of last year.

The company also said its coal-bed methane (CBM) block in Raniganj in West Bengal achieved production of 655,000 standard cubic meters per day of gas.

"Essar Oil is presently India's largest CBM gas producer. As many as 286 wells have been drilled and the company is on course to increase production to 2.5 million standard cubic meters per day," it said.