On the back of higher refining margins, Essar Oil on Monday reported a net profit of Rs 469 crore for the first quarter ended June 30. The company had registered a net loss of Rs 70 crore in the same period a year ago.
Essar Oil earned $7.38 on processing every barrel of crude oil in the April-June period of current fiscal, 27% more than $5.79 per barrel gross refining margin (GRM) it earned in the same period in the previous year, the company's CEO, Naresh K Nayyar, told reporters in a conference call.
"For the past several quarters, we have been consistently reporting profits that have been driven by record refinery throughput and a healthy uplift in GRM," he said.
The company's sales rose 37% to Rs 16,478 crore from Rs 12,048 crore in Q1 of FY 2010-11 and its refinery at Vadinar processed 3.62 million tonnes of crude oil - 135% capacity utilisation.
Nayyar said the phase I expansion, under implementation now, will raise the refining capacity from 14 million tonnes per annum to 18 MT a year.
The company is investing $1.8 billion in the phase I expansion of Vadinar, and is acquiring Stanlow refinery for $350 mn.
Essar Oil, Nayyar said, has a total of 1,639 petrol pumps. Petrol and diesel at its outlets is priced higher than its dominant public sector competition, which get government subsidy for selling fuel below cost.
"We are looking at tapping the opportunity of retailing auto LPG and CNG in Essar Oil outlets through tie-ups with Aegis Logistics, Sabarmati Gas, GAIL India and Adani Gas."