Essar Oil is planning to halve its interest outgo by this fiscal end with dollarisation of its balance-sheet, CFO Suresh Jain has said.
Dollarisation of balance-sheet involves conversion of rupee loans into the dollar borrowings, in order to reduce interest outgo by taking advantage of lower rates overseas. The company would be able to cut its annual interest outgo of Rs3,000 crore to nearly Rs1,200 crore if it manages to raise $2.3 billion this fiscal. “We wanted to close $2.2 billion by September. Till date we have dollarised $800 million. Only addition in last quarter is about $50 million,” Jain said.
For the second quarter, the company reported a net loss of Rs71 crore against a net profit Rs105 crore a year ago mainly on account of foreign exchange losses and higher interest payment, which amounted to Rs773 crore and Rs766 crore, respectively.
Revenues during the quarter rose 19% to Rs27,392 crore, mainly on higher output of 5.18 million metric tonne and rupee depreciation.
Essar Oil, which runs a huge refinery in Vadinar, Gujarat, saw marginal reduction in gross refining margins (GRM), which fell to $6.93 per barrel compared with $7.86 bbl a year ago. “Although our refinery has performed much better than the benchmark margins, GRM has come down because the benchmark GRM has crashed. Benchmark has reduced by almost $3 this quarter,” Jain said. Going forward, he hopes GRM margins to improve.
On Rs6,165 crore sales tax dues for which it sought more time for payment, managing director L K Gupta said, “We are the only refinery which has not received any incentive, because we delayed our expansion.”