Essar Oil posts Rs 684 cr profit in Apr-June period

Revenue up 11% at Rs 27,317 crore

Essar Oil today reported a net profit of Rs 684 crore in the June quarter as opposed to a net loss of Rs 863 crore in the same period last year, after its Vadinar refinery posted best refining margins among its public and private sector peers.

The net profit of Rs 684 crore, or Rs 4.72 per share, in April-June compared with Rs 863 crore net loss, or a negative Rs 6.32 per share, in the same period a year ago, the company said in a statement.

Its 20 million tonnes a year Vadinar refinery in Gujarat earned $9.04 on turning every barrel of crude oil into fuel in the first quarter as compared to a gross refining margin (GRM) of $7.01 per barrel in the same period of the last fiscal.

The GRM was better than its public sector and private competition. Reliance Industries' Jamnagar refineries reported a GRM of $8.70 per barrel in Q1 while state-owned Indian Oil Corp (IOC) reported $2.25 per barrel margin. Bharat Petroleum Corp Ltd (BPCL) was a shade better at $3.38 while Hindustan Petroleum Corp Ltd (HPCL) reported a GRM of $2.04 a barrel as both its refineries were shut for maintenance during the quarter.

Mangalore Refinery and Petrochemicals Ltd (MRPL) reported a GRM of $0.66 per barrel while Chennai Petroleum Corp Ltd (CPCL) reported $1.88 per barrel GRM.

Essar said its refinery processed 5.14 million tonnes of crude oil in April-June, unchanged from the previous year. Revenue was up 11% at Rs 27,317 crore.

Essar Oil Managing Director and CEO L K Gupta said: "Operationally we continue to do well with the refinery operating at over 100% capacity. Our capability of sourcing, blending, and processing of heavy and ultra heavy crude, coupled with a product mix geared towards light and middle distillates, have resulted in healthy margins."

CFO Suresh Jain said: "Consistency in operating performance coupled with stable forex and crude prices helped us to sustain our GRM and profitability."

During the quarter, Essar Oil realised 66% of its revenues from the domestic market. It has about 1,400 retail outlets across the nation, with over 300 in various stages of commissioning. "We are now working to restart diesel sale from our retail outlets in phases," the statement said.

Essar said its CBM block in Raniganj in West Bengal is producing around 220,000 standard cubic metres per day of gas, which is being sold locally through pipeline and cascades.

"We have drilled 209 wells and laid requisite infrastructure including pipelines to supply CBM Gas to end consumers. Three Gas Gathering Stations (GGS) are complete and one more is under construction," the statement added.