Power plant operator and oil refiner Essar Energy reported an 18 percent rise in core earnings for the first-half as the benefit of a contribution from its British Stanlow refinery offset its struggling Indian power business.
The company, which is 77 percent-owned by privately held Indian conglomerate Essar Group, said operational earnings before interest, tax, depreciation and amortisation (EBITDA) was $383 million for the six months ended Sept. 30.
The company, which recently changed its accounting period, reported operational EBITDA of $324 million in the six months to June 30, 2011.
Essar said Stanlow, the second largest UK refinery which Essar acquired from Royal Dutch Shell last year, had operational EBITDA of $132 million in the first half.
The company's power business continues to be hit by regulatory and coal supply issues in India, where it is struggling to obtain the permits it requires to mine the coal needed to fuel its stations.
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Essar Energy turns around Stanlow refinery
New Delhi: (PTI) London-listed Essar Energy plc has turned around UK's second largest refinery Stanlow within a year of taking it over from Royal Dutch Shell, posting a pre-tax profit of USD 197 million in six month to September 30.
"Current price EBITDA at Stanlow rose to USD 197.2 million, compared with USD 22.2 million in the first eight months of ownership to March 2012," the company said announcing its second quarter earnings.
Shell divested its refinery assets for not being profitable.
Stanlow had been run by its previous owner (Shell) as a cost centre, and had been for sale for some time when Essar purchased it, by which time employees had concerns for their future. Essar Energy acquired the refinery for USD 350 million from Shell on July 31, 2011.
Gross refinery margins rose to average USD 8.03 per barrel, compared with USD 3.06 a barrel in the first eight months to March 2012.
"Of this margin uplift, USD 1 per barrel is due to internal initiatives and investments as part of the '100 day plan' put in place following acquisition by Essar for USD 350 million in July 2011," the company said in a statement.
Essar said initiatives and investments at Stanlow aimed at improving margins by a total USD 2-USD 3 per barrel by 2014-15 (including the USD 1/barrel just achieved) are continuing - including installation of natural gas to fuel