Essar Oil reports net profit of Rs 105 crore

MUMBAI: Essar Oil reported a net profit of Rs 105 crore in the July-September quarter, bouncing back from losses in consecutive quarters for a year. The oil refining company, which had reported a loss of Rs 419 crore in the September quarter a year ago, benefited from a robust improvement on gross refining margin (GRM) and increase in output. Sales in the second quarter of 2012-13 rose 67% year-on-year to Rs 23,023 crore.

The company is upbeat about its performance in the future. "While the current price GRM of the second quarter shows good upward movement with the completion of our expansion and optimisation projects, the full benefit, including from the coal-fired power plant, will be reflected from the current quarter onwards," LK Gupta, managing director and chief executive officer, was quotes as saying in a press release. Essar Oil reported current price gross refining margin of $7.86 per barrel in the September quarter, up 55% compared to $5.07 per barrel in Q2FY12. Essar said that its Vadinar Refinery processed 5.07 million tonne of crude in July-September, up 66% on year.

"The refinery is now functioning at full capacity of 20 million tonne per annum with all units stabilized," the company said. Chief Financial Officer Suresh Jain said, "The benefits of complex refinery and increased capacity has started reflecting in our profitability and with the conclusion of sales tax matter post Supreme Court judgment and the company's proposal on CDR exit being accepted by the lenders, we are now fully geared to deliver value to our stakeholders." In September, the Supreme Court passed a judgement in the Gujarat Sales Tax case, directing Essar Oil to pay the balance sales tax dues of Rs 5,165 crore in instalments over two years in eight quarterly instalments.