Mumbai: Essar Oil Ltd posted a net profit of Rs.105 crore for the three months ended 30 September—its first in four quarters—mainly on improved performance at its refinery in Vadinar, Gujarat.
The oil refining firm of Essar Group added capacity at the refinery in the first quarter of fiscal 2013 for it to handle 20 million tonnes per annum of crude, leading to the profits. It had made a loss of Rs.419 crore in the year-ago September quarter.
Total operating revenue improved 62% year-on-year to Rs.21,023 crore. Gross refining margin (GRM)—or the difference between the cost of processing crude and the revenue earned from selling finished petroleum products—stood at $7.86 a barrel, 55% higher than a year ago.
“While GRM of the second quarter shows good upward movement with the completion of our expansion and optimization projects, the full benefit, including from the coal-fired power plant, will be reflected from the current quarter onwards,” L.K. Gupta, Essar Oil’s managing director and chief executive, said.
The company’s earnings in the September quarter were also aided by a notional foreign exchange gain of Rs.439 crore on calculating its crude payment liability, as the rupee strengthened against the dollar. It had suffered a notional foreign exchange loss in the June quarter as well as in last year’s September quarter due to a weakening rupee.
Essar Oil, which also retails petroleum products through its retail outlets, has witnessed a substantial ramp-up in volume sales after state-run oil marketing companies recently hiked prices.
There has been a 60% increase in the amount of petrol sold at Essar Oil’s retail outlets after the price hike, S. Thangapandian chief executive of Essar’s oil marketing business, said.
The firm’s shares lost 3.73% on BSE on Friday to close at Rs.64.60 apiece, while the benchmark index, Sensex, fell 0.86% to end at 18,683.68 points. Over the past year, Essar Oil has shed 22.22% while the Sensex has gained 7.61%.