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Oil and gas major Essar Oil saw a five-fold jump in fourth-quarter net profit ended March 2014 at Rs 1,008 crore against Rs 200 crore in the year-ago period on the back of increase in forex gains and higher refining margins.
The company’s gross refining margin or the difference between the cost of processing a barrel of crude oil and the final sale price of processed fuel stood at $10.12 per barrel for Q4 of FY14 against $9.06 in the year-ago period. Meanwhile its forex gains owing to rupee appreciation in the Q4 were at Rs 314 crore against a gain of Rs 25 crore in corresponding quarter last year.
Essar Oil Managing Director & CEO L K Gupta said: “The company has returned to profitability for the full year and has breached the one lakh crore revenue mark. Operationally we continue to do well with the refinery further optimizing on its crude diet and product slate, which has resulted in the company delivering healthy GRMS at $10.12 per barrel.”
Its total revenue increased by 7 per cent to Rs 25,274 crore for Q4 this year against Rs 23,650 crore in the year ago period. The company also processed 5.05 million tonnes of crude oil in Q4, marginally lower than 5.08 million tonnes a year earlier.
For the full fiscal year, Essar Oil ended FY14 with a net profit of Rs 126 crore against a loss of Rs 1,180 crore in the previous financial year.
The company’s total debt as on March 31, 2014 declined to Rs 19,109 crore from Rs 21,751 crore on March 31, 2013 said company CFO Suresh Jain.
Though Essar Oil has 1,400 petrol pumps with another 300 pumps in various stages of commissioning but for the time being the company’s key focus going forward would be on improving its leverage position and not undertaking any new capex.
“Our present debt equity ratio is 1:7 so once we achieve a comfortable debt equity ratio of 1: 2 or less in line with acceptable levels then only we would consider any new investment plans. If we continue with quarterly results such as the one shown in Q4 of FY14, we should be able to achieve a good debt equity ratio in the next 18 to 24 months,” said Gupta.
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