It earned $9.4 on turning every barrel of crude oil into fuel as compared to a GRM of $8.4 in the previous fiscal
Essar Oil (UK) Ltd, a subsidiary of Essar Energy, which owns and operates the Stanlow refinery has reported a 4.2% year-on-year decline in its net profit during fiscal 2018 to $161 million. The company said the drop was on account of lower processing as the refinery was closed for about two-and-a-half months for upgradation.
In a conference call to disclose the financial results, S Thangapandian, company CEO, said the refinery has completed the execution of all project upgrades during the turnaround and he expected the margin improvements will yield an incremental margin of $75 million to $80 million annually in the prevailing market. Essar has invested over $850 million in Stanlow since its acquisition in July 2011. The company's gross revenue grew 10.2% year on year during the last fiscal. It earned $9.4 on turning every barrel of crude oil into fuel as compared to a GRM of $8.4 in the previous fiscal.
"We operated for only nine-and-a-half months of the year as compared to 12 months in the previous fiscal," he said, adding profits would have been around $275 million if the refinery was operated for full year.
Thangapandian said the one of the key priorities was to increase the market share in direct supply of aviation fuel to leading carriers, with agreements now in place with airlines at a number of UK airports. According to Thangapandian, jet fuel is a stream of petroleum that has a longer life in comparison to automobile fuel, whose demand may dwindle with the increasing usage of electric vehicles (EVs).
Sampath P, CFO at Essar Oil UK, said, "Despite the significant capex and planned reduction in throughput due to the turnaround, the company still posted an Ebitda of above $300 million for the third consecutive year. The major optimisation improvements implemented during the year will deliver increased margins going forward on the back of higher throughputs, reduced crude costs and enhanced higher value product yields."
Essar Oil UK chairman Prashant Ruia in a statement said that Stanlow has a 16% market share in the UK and a growing presence in the retail and aviation sectors.
...& ANALYSIS
- $9.4 gross refining margin of the Stanlow refinery
- The company's gross revenue grew 10.2% during the last fiscal
(With inputs from PTI)
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