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This year, the company moved its financial year-end from December March, making the previous comparative period a 15-month one. Refining margins for the year were up 79 per cent to $7.96 per barrel. Naresh Nayyar, CEO of Essar Energy, said earnings before interest, taxation, depreciation and amortisation (Ebitda) on current price basis was $1.33 billion in the year ended March 31, compared with $484.5 million in the 15 months ended March 31, 2012.
“The recently completed projects in our refining and power businesses are now delivering good results. The much higher margins seen at our flagship Vadinar refinery reflect the benefit of investment in increased complexity and capacity. Our Stanlow refinery has achieved considerably improved margins through implementing its 100-day plan. In power, we continue to deliver increased capacity and generation at a time when demand remains strong,” said Nayyar.
Revenue stood at $16.57 billion in refining and marketing in India, up 9 per cent from last year’s 15-month-period, while refining and marketing revenue from the UK climbed 61 per cent from the previous year’s 15-month-period to $10.24 billion.Revenue from the power segment increased 26 per cent to $448.6 million, against $356.5 million generated in the previous 15-month-period.
The company said its focus is now to complete its remaining projects, continue optimising operations, reduce financing costs and net debt. “We are making good progress on these fronts and we continue to be encouraged by the strong energy market dynamics in India,” said Nayyar.
The firm will spend $200 million to convert two of its gas-based power plants in Gujarat — 515 MW Hazira power plant and 500 MW Bhander power station — to coal-fired boilers based on imported coal due to issues regarding the availability of domestically-produced natural gas.Nayyar said, “Given the gas position in the country, it doesn’t make sense to generate electricity using high-priced imported LNG. Generating power through imported coal would be cheaper than LNG-based power generation.”
The conversion, however, would take three years to complete and would be subject to necessary approvals.An unexpected fall in output from Reliance Industries' eastern offshore KG-D6 gas fields has left many gas-based power plants in the country stranded. On Essar’s Kenya Refinery, Nayyar said the government there has expressed its desire to convert the refinery into a terminal and that the company is in talks with the government on the same.Essar’s refinery in Mombasa, Kenya, is the only one in Eastern Africa and the first international one acquired by any Indian company.
