Essar Energy profit soars 49%

India-focused refiner and power generator Essar Energy’s earnings rose 49% in the first-half of the year on the back of higher refinery margins, but the company said it continues to battle delays to regulatory approvals.

The company said on Tuesday it is still awaiting forest clearance from the Government of India for its Mahan, Chakla and Ashok Karkata coal blocks which will provide fuel for the Mahan I and Tori power stations.

“Delays to regulatory approvals and delays to the access of fuel supplies are a cause for concern,” Essar Energy said on Monday.

“Not only do these delays impact the economic returns on projects, but they are acting to discourage investment in the sector from project sponsors, debt providers and equity investors.”

For the six months ended June 30, the company posted earnings before interest, tax, depreciation and amortisation (Ebitda) of $477.9 million, up from $320.2 million last year.

Refining and marketing Ebitda was up 73% to $385.7 million, as refining margins rose 38% to $8.3 per barrel.

“Strong global demand, the earthquake in Japan and events in the Middle East and north Africa pushed up refining margins in the first half of 2011 and they have remained at these elevated levels,” Essar Energy said.

“We believe refining margins are likely to remain at current levels through to the end of 2011.”