New Delhi: London-listed Essar Energy Plc. on Monday reported a pre-tax loss of $ 1.14 billion for 15 months to 31 March, weighed down by a Supreme Court ruling on payment of local sales tax. Essar Energy, which changed its accounting period during the year, said the loss compared with a pre-tax profit of $365.5 million in the 12 months to 31 December 2010.
The Supreme Court earlier this year ruled that Essar Oil Ltd was liable to pay $1.2 billion in a tax dispute with the state government in Gujarat, where the firm’s Vadinar refinery is located.
A file photo of an Essar Oil refinery
On Monday, the Gujarat high court rejected a petition from the company seeking that it be allowed to pay the tax dues in eight yearly instalments and be given an exemption from paying penalty and interest on it.
The swing into the red came in spite of Essar’s revenues more than doubling from $10 billion in 2010 to $21.96 billion for the 15-month period, on the back of higher selling prices and the UK’s Stanlow refinery acquisitions.
The company said it expects margins to remain volatile throughout 2012.