Mumbai: Essar Oil (UK) Ltd, which owns and operates UK’s Stanlow Refinery, posted its highest-ever half-year net profit, helped by high refining margins and forex gains, the company said on Wednesday.

Net profit of $169 million in April-September was 231% higher than the $51 million reported in the same period a year earlier. The company recorded a foreign exchange gain of $25 million and gross refining margin of $11 per barrel.

“A strong operational performance, supported by product cracks, has enabled us to post record figures for a half-year period and again improve our delta over the benchmark margin," S. Thangapandian, chief executive of Essar Oil UK, said on a conference call from London.

Essar Oil UK is controlled by the Ruia-family which sold Essar Oil to Russian energy major Rosneft for $12.9 billion this August.

Pre-tax profit or earnings before interest tax depreciation and amortisation (ebitda) more than doubled to $264 million.

During the period, the company recorded gross refining margin (GRM) of $11 a barrel against $7.6 per barrel in the first half of FY2017. GRM is what a refining company earns from turning every barrel of crude oil into fuel.

This September, Essar had said it would invest $250 million in the Stanlow refinery to revamp and boost production. The refinery which produces over 16% of transport fuels in the UK, also plans to have 400 petrol pumps in the region in the next five years. Essar Oil currently has 46 petrol pumps in the UK.

Essar Oil UK plans to open its first company-owned fuel retail outlet in Stanlow in mid 2018. The outlet will also have charging points for electric vehicles.

The investment of $250 million will help Stanlow deliver improved yields across the product slate, drive revenue growth and increase refinery capacity from 68 million barrels to 75 million barrels by March 2018.

“We are investing $100 million in Tiger cub (the revamp programme) and this would improve our margin to about $0.8 per barrel, translating to an additional revenue of $78 million by FY19," chief financial officer Sampath P. said on the conference call.

Investment in the revamping of certain units of the refinery would help the company cut down on crude oil processing cost and improve the product slate.

The company has also entered into the direct aviation fuel supply market by selling Stanlow fuel to airlines including Emirates, Etihad, Jet2.com and Oman Air.

Essar Oil UK has invested over $800 million in the refinery so far. The company acquired the Stanlow refinery in July 2011 from Royal Dutch Shell for $1.3 billion.

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