Ruias-promoted Essar Oil on Tuesday reported highest ever gross refining margin (GRM) at $13.25/barrel during the October-December quarter of FY16. It had reported a GRM of $11.05/barrel in the quarter ended June 2015.
Gross revenues for the third quarter of FY16 stood at Rs 13,947 crore, compared with Rs 22,220 crore in the same period last year. “This decline in revenues was due to the fall in oil prices and lower throughput due to the continuation of shutdown for 15 days in the quarter,” Essar Oil said in a statement.
However, better GRMs helped the net profit jump seven times to Rs 364 crore during October-December of FY16 against Rs 52 crore in the same quarter of previous year. The EBIDTA increased by 36% to Rs 1,759 crore against Rs 1,291 crore in Q3FY15.
Refinery throughput stood at 4.24 million tonnes in Q3FY16, against 5.19 million tonnes in the same quarter of the previous year. Suresh Jain, chief financial officer said that retail business contribution in overall revenue has improved to 16% in Q3 of FY16 against 6% in Q3 FY15 and “it will be the key driver to foster the overall growth and profitability of the company.” During the quarter under review, Essar Oil sold nearly 450,000 kilo litres of petrol and diesel through its 1,910 retail outlets.
Essar Oil had denied to comment for a possible stake sale in the company to firms other than Rosneft. In 2015, Russian giant Rosneft has signed a preliminary agreement with the Essar group, controlled by the Ruias, to buy a 49% in Vadinar refinery and supply 100 million tonnes of oil to the latter for the next 10 years. Refining accounts for over 95% Essar Oil’s overall business.
However, there were reports that Essar Oil is also in talks with Saurdi Aramco and Iranian firm for a possible stake sale.
“Rosneft is in the final stages of carrying out the due diligence,” said Lalit Kumar Gupta, managing director and chief executive officer of Essar Oil and terming other reports as market speculations. Gupta, however, did not reveal a time frame when the deal with Rosenft could be sealed.
During the quarter, Essar Oil commissioned 220 new retail outlets taking the total operational outlets nationwide to 1,910. As many as 2,186 are at different stages of implementation, the Ruias-owned firm said.
The promoters of Essar Oil completed the delisting process from the National Stock Exchange and Bombay Stock Exchange after agreeing to pay Rs 262.8 per share to the public shareholders.