Essar Oil

Essar Oil for Q4FY14 reported gross revenues of Rs 27,691 crore, up 7.5% (YoY). Yet, it ended the quarter with a net profit at Rs.1008 crore, up from Rs.200 crore in Q4FY13 and a meager Rs.52 crore in Q3. Thus surge in net profit despite the flattish growth in top line was on account of reduction in operating costs, 24% (YoY) drop in interest outgo and forex gain of Rs.314 crore. A smart rise in its Gross Refining Margin (GRM) for Q4FY14 also helped – it was at $10.12/bbl v/s $9.06/bbl in Q4FY13 and this was much higher than the $7.27/bb GRM reported for Q3FY14.

The Vadinar Refinery, at 20 MMTPA capacity and 11.8 complexity, is India's second largest single site refinery and amongst the most complex globally for a facility of this scale. During the quarter, it processed 5.05 MMT of crude, which was almost at the same level of 5.08 MMT processed during Q4FY13. Vadinar Refinery continues to operate above 100% capacity post expansion.  For Q4Fy14, 66% of its revenues came from the domestic market, against 58% and 44% in the immediate past two quarters, on account of improved domestic demand for gasoil.  Retail marketing accounted for 2% of the company's total sales. Essar Oil currently has about 1,400 retail outlets across the nation, with over 300 in various stages of commissioning.  At its Raniganj CBM block, current gas production is around 190,000 standard cubic metres per day (scm/d), which is being sold locally through pipeline and cascades. It has 183 wells, of which 151 are producing. The company has laid pipelines of 48 kms and 30 kms to Durgapur Industrial Area and Matix respectively. Three Gas Gathering Stations (GGS) are complete and one more is under construction. 

The company ended FY14 on a high note. Its revenue rose 11% at Rs.1,07,190 crore, surpassing the rupees one lakh crore revenue mark for the first time. Throughput for the year was up 2.3% to 20.23 MMT.  GRM for the fiscal was up marginally from $7.96/bbl to $7.98/bbl. What is noteworthy is that Premium over benchmark IEA margin for the full year was at $8.82/bbl against $6.80/bbl in FY13. This was achieved on the back of improved crude diet—93% heavy and ultra heavy crude processed in FY14 vs 86% in FY13—and stable product slate. It ended the fiscal with a net profit at Rs.126 crore v/s loss of Rs.1,180 crore in FY13.