The slump in global refining margins and weak rupee condemned Essar Energy (ESSR) to a core half-year pre-tax loss of $44.4m (£27.4m) compared with a profit of $52.7m last year.
A 15 per cent fall in the value of the rupee against the US dollar caused a foreign exchange loss of $483m for the India-focused power generator and oil refiner - last year it was $134m. Profitability was also held in check by increased financing and depreciation charges as new power projects came online in late 2012. Even excluding these charges, Essar's underlying cash profit fell by 7 per cent to $544m.
A 45 per cent increase in generating capacity grew profit at Essar's power division to $147m from $93m, but there was a mixed bag in refining. An upturn in half-year throughput at Essar's flagship Vadinar refinery to 72.9m barrels maintained margins there above target at a $7.90 per barrel premium to its Singapore benchmark. However, throughput at Essar's Stanlow refinery fell by 7 per cent to 36.3m barrels, and damage caused to a furnace in the current maintenance programme means that full-year production at the Ellesmere Port site is now expected at just 59m barrels, down 8m barrels on the previous estimate.
Deutsche Bank expects full-year adjusted EPS of 24¢ (17¢ in 2013).
ESSAR ENERGY (ESSR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 99p | MARKET VALUE: | £1.29bn | |
| TOUCH: | 98p-99p | 12-MONTH HIGH: | 155p | Low: 94p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 185¢ | NET DEBT: | 263% | |
| Half-year to 30 Sept | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 12.8 | -283 | -13.8 | nil |
| 2013 | 13.4 | -499 | -26.4 | nil |
| % change | +5 | - | - | - |
£1=$1.62 | ||||
