Improvements in refining margins, and the successful execution of the Vadinar refinery expansion, meant India-focused Essar Energy (ESSR) beat analysts' expectations at the full-year stage. In fact, group cash profit soared 176 per cent in the period to $1.33bn (£0.86bn).
The group has certainly made progress on the operating front. For example, there was a 16 per cent increase in throughput at Vadinar, to 19.8m tonnes (against 2012's 15-month period), and Vadinar's current price gross refinery margin soared 79 per cent to $7.96 a barrel. The upsurge at Essar's Stanlow refinery in the UK, acquired in 2011, was even more pronounced - it reached $7.38 a barrel, compared with last year's $3.06. The outcome would have been better still but for a 16 per cent reduction in cash profit at Essar's power segment - although that business still achieved a 144 per cent increase in generating capacity. Essar now plans to improve profitability at this business by converting the 515 megawatt (MW) Hazira, and 500MW Bhander, power plants to coal-fired boilers, instead of natural gas.
JPMorgan Cazenove expects cash profit of $1.42bn for 2014, and adjusted EPS of 16¢ (from 1¢ in in 2012).
| ESSAR ENERGY (ESSR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 122p | MARKET VALUE: | £1.59bn | |
| TOUCH: | 121-122p | 12-MONTH HIGH: | 155p | LOW: 99p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 239¢ | NET DEBT: | 259% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 7.02 | 0.29 | 17.0 | nil |
| 2010 | 10.0 | 0.37 | 17.1 | nil |
| to 31 Mar | ($bn) | ($bn) | (¢) | (¢) |
| 2012* | 22.0 | -1.15 | -53.0 | nil |
| 2013 | 27.3 | -0.16 | -12.5 | nil |
| % change | +24 | - | - | - |
*15-month period £1=$1.54 | ||||
