OIL AND GAS: margin improvements delivered at Vadinar and Stanlow refineries
Vadinar Current Price Gross Refinery Margins (CP GRM) increased 79% to US$7.96/bbl in FY2013 against US$4.45/bbl (excluding sales tax benefit) in 15 mths FY2012 and Vadinar throughput increased 16% to 19.77mmt (140.3mn bbls) in FY2013 against 17.1mmt (125mn bbls) in 15 mths FY2012, both due to completion of the refinery upgrade
R&M India CP EBITDA increased 252% to US$823.8mn in FY2013 from US$234.2mn in FY2012
Stanlow CP GRM increased 141% to US$7.38/bbl in FY2013 against US$3.06/bbl in FY2012 due to improved market conditions and margin enhancement benefits
R&M UK CP EBITDA increased to US$317.2mn in FY2013 from US$12.8mn in FY2012 (first 8 months of ownership)
Margins at Stanlow have been improved by US$2.2/bbl since acquisition. This is ahead of schedule and delivered a US$1.2/bbl average benefit during FY2013
Increased Stanlow margin improvement target; from US$3/bbl to US$4/bbl by end FY2015
E&P, Raniganj coal bed methane gas field received all environmental clearances to allow full field development
POWER: increased capacity and generation from new projects
Generation capacity increased 144% to 3,910 MW from 1,600 MW at the end of FY2012 (including 600MW unit 1 of Mahan which was synchronised during the year)
Generation output increased 27% to 10,017 MU in FY2013 from 7,907 MU in FY2012
Power business Operational EBITDA increased 5% to US$224.7mn in FY2013 compared to the 12 months to 31 March 2012
FUNDING: focus on dollarising rupee debt, reducing finance costs and repaying debt
R&M India completed exit from Corporate Debt Restructuring
US$481mn of R&M India Rupee term loans refinanced to US dollars - further dollarisation of debt progressing well
R&M UK completed inventory monetisation transaction and repaid working capital facility of US$1.5bn
Rs.6.29bn bond (c.US$114mn) raised in May 2013 at Essar Power to repay power project liabilities - further bond issues progressing well
OUTLOOK: ongoing high demand growth for energy in India
Diesel demand in India forecast to continue rising at c.6%-7% per year, gasoline at c.4-5% per year
Power demand in India forecast to continue rising at c.6% per year
Naresh Nayyar, Essar Energy Chief Executive Officer, said: "The recently completed projects in our refining and power businesses are now delivering good results. The much higher margins seen at our flagship Vadinar refinery reflects the benefit of investment in increased complexity and capacity. Our Stanlow refinery has achieved considerably improved margins through implementing its 100 day plan. In power, we continue to deliver increased capacity and generation at a time when demand remains strong.
"Our focus now is to complete our remaining projects, continue optimising our operations, reduce our financing costs and to reduce our net debt. We are making good progress on these fronts and we continue to be encouraged by the strong energy market dynamics in India."
