MUMBAI: Record refining margins and around USD 25 million forex gains helped Essar Oil UK, which owns and operates the 9-million tonne Stanlow Refinery, report its highest ever half-yearly net income at USD 169 million.
Post-tax profit of USD 169 million or Rs 1,082.61 crore in the first half of the current fiscal is a 231 per cent growth over USD 51 million in the year-ago period, the company said.
The company said the massive jump in net income was driven by record refining margin which soared to USD 11 a barrel from USD 7.6 per cent a year ago and forex gains of around USD 25 million.
The management however said such high level of margins are not sustainable in the long-run but exuded confidence that the ongoing USD 250 million reconfiguration of the plant will help it net better margins.
The Ruias-owned the company, which is focusing on its retail expansion, will have 400 petrol pumps by the turn of 2022, and the first company-owned outlet will come up in Stanlow mid 2018, chief executive S Thangapandian told reporters in a concall from London today.
Currently the company that meets over 16 per cent of the transportation fuel demand of the British market, runs 46 petrol pumps. The upcoming Stanlow fuel pump will have two- three charging points for electric vehicles as well, he said.
"We had a record half-year net profit as the market has been good and units have been run very efficiently," he said, adding pre-tax profit more than doubled to USD 264 million.
He said innovations are made to increase high-value transport fuel throughput. Jet fuel production has increased to 135-140 kilo tonne a month from 120 kilo tone a month previously.
On the USD 250-million expansion, which will increase the throughput to 75 million barrels from 68 million barrels, will be completed by March, Thangapandian said, adding this will help it cut down on crude processing cost, improve product slate and lead to marginal increase in capacity.
Going forward, he said the company will focus on jet fuel supplies and has accordingly tied up with major airlines like Emirates, Etihad, Jet2.com and Oman Air for direct supply of the fuel.
He said the company leased a storage in Rotterdam, together with blending and jetty infrastructure, in order to cater to gasoline export markets directly. Essar has invested over USD 800 million since acquiring Stanlow in July 2011 including USD250 million for the ongoing expansion.
It can be noted that the Ruias had sold its cashcow Essar Oil India that operates a 20 million tone refinery in Vadinar to Russian government run Rosneft for USD 12.9 billion in August.