Essar Oil (UK) records its best ever financial results, net profit up $244 mn in FY16 against $70 mn in FY15

Essar Oil (UK) records its best ever financial results, net profit up $244 mn in FY16 against $70 mn in FY15

Essar Oil (UK) Limited, which owns and operates the Stanlow Refinery, announced its best ever financial results for the year ending March 31, 2016. The company’s net profit rose to $244 million as against $70 million in FY15.

Stanlow continued to benefit from its optimised single train site operation, which increased the yield of high margin products such as gasoline and middle distillates, whilst reducing production of lower margin products like naphtha and fuel oil.

During the year, Stanlow, which produces 16% of the UK’s transport fuel demand, processed 8.97 MMT of crude, a 5% increase on the previous year’s 8.54 MMT.

Since Essar, controlled by the billionaire Ruia brothers, acquired Stanlow in July 2011, their entrepreneurial approach, strong focus on margin booster opportunities, significant capital investment and new finance facilities have given the refinery a sustainable long term future.

Operational and financial performance:  Key Indicators

March ending FY16 FY15 Growth
Throughput (in MMT) 8.97 8.54 5%
Gross Revenue (in $m) 4,992 7,615 (34%)
CP GRM (in $/bbl) 9.3 8.3 12%
EBITDA (in $m) 359 177 103%
Profit after Tax (in $m) 244 70 249%

Essar has optimised Stanlow’s configuration to significantly improve the production of high value products, materially diversified the crude slate with the introduction of 25 new grades, connected the site to the natural gas grid and delivered a wide range of cost efficiencies. Essar Oil has spent $545m since acquisition in its capital investment programme.

Essar-Oil-(UK)-records-its-best-ever-financial-results,-net-profit-up-$244-mn-in-FY16-against-$70-mn-innew

Gross revenues for the 12 months were $4,992 million, a 34% drop to the $7,615 million reported in FY15, primarily due to the lower crude oil price which fell 44% year-on-year average. EBITDA was a record $359 million for the year, against the $177 million reported for FY15.

READ  Wind power does better than anticipated by ICRA

Essar Oil UK moved into downstream integration, with a highly successful entry into the UK fuel retail market. With seven sites already operational, the business has confirmed ambitious plans to grow its retail network within the UK market to 400 sites over the next three years.

The company also committed to a significant capex investment of $137 million in project Tiger Cub for major improvements to key units at Stanlow which will deliver further reduction in crude costs and improved yields across the product slate.

“This was a good year for the business, with the strong financial and operational performance reflecting the significant improvements made by Essar in optimising Stanlow since acquiring the refinery,” said Naresh Nayyar, Executive Chairman, Essar Oil UK.

Narsh Nayyar

“The market was supportive and our reliability and flexibility ensured we could capture those opportunities.  Looking forward, our ongoing margin improvement initiatives, major capex investment project and ambitious plans for downstream integration through the UK retail sector will deliver a truly sustainable and successful future for us,” he said.

“This is a business in a strong financial position with no long term debt and strategic plans in place to further improve our refining margins. The figures for both our Profit after Tax (PAT) and EBITDA are records for Stanlow under Essar ownership and were supported by product cracks throughout the year,” said Sampath P, Chief Financial Officer, Essar Oil UK.

Anupama Airy
Follow Me

Anupama Airy

Founder and Editor at EnergyInfraPost
Independent Journalist and Energy Expert.​ (Worked with leading mainline financial and national daily for 23 years.​)​ Also, Guest Contributor with busines​sinsider.in
Currently, Writing a Book for Penguin India Titled Greased Pole:How Politics and Lobbying Stifled India’s Energy Dreams. The author can be reached on anupama.airy@gmail.com (9810661825)​
Anupama Airy
Follow Me

Leave a Reply

Your email address will not be published.