Essar Energy Announced Results for 12 Months Ended 31 December 2011
OREANDA-NEWS. February 27, 2012. Key Highlights
Regulatory environment – outlook improving
Outlook for power projects significantly improved
‘Go/No-Go’ concept removed in relation to forest clearances for coal mines
Indian Prime Minister intervention in power sector - promises ‘road map’ to resolve major issues:
Coal
Oil and Gas
13.1mmt throughput at Vadinar refinery (2010: 14.7mmt) following 35 day planned shutdown for tie-in of new units
Vadinar refinery phase 1 expansion to 18mmtpa on schedule for completion by end March 2012
Vadinar refinery optimisation project to 20mmtpa on schedule for completion by end September 2012
4.2mmt throughput at Stanlow refinery for 5 month period of ownership – in line with expectations
Stanlow refinery benefiting from actions to improve margins and removal of uneconomic capacity in European refining sector
Significant uplift in gas reserves at Raniganj block
Power
92%-100% power plant availability
Power projects due for completion in 2012 making solid progress
Construction of three later stage power projects to progress based on regulatory and coal mine milestones to focus on managing risk and delivering near term value
In principle ‘Pinjam Pakai’ (forest) approval for Aries coal mine – progressing related infrastructure
Mahan, Chakla and Ashok Karkata coal blocks removed from ‘Go/No-Go’ concept
Sales Tax
Sales tax deferment case set aside by Supreme Court of India – Review Petition filed on 15 February 2012
Reversal of sales tax benefit revenue previously recognised of USD 1,070.4 million (USD 655.5 million net impact after tax)
Essar Energy taking steps to ensure sufficient liquidity to meet sales tax and all other liabilities
Financial results
Strong group revenue growth (including sales tax benefit but before its subsequent reversal) up 60% to USD 16.0bn (2012: USD 10.0bn), primarily due to 21% higher refining and marketing revenues in India from higher selling prices and the Stanlow refinery acquisition
Sharp depreciation of Rupee since August 2011 resulting in a foreign exchange impact of USD 303 million1 on EBITDA2, including mark to market impact of USD 253 million
Group Current Price (CP) EBITDA2 of USD
Profit before tax (including sales tax benefit but before its subsequent reversal) down 76% to USD 89.2 million (2010: USD 365.5 million)
Loss before tax of USD (881.1) million after USD 970.3 million impact from reversal of sales tax benefit
Profit after tax (including sales tax benefit but before its subsequent reversal) down 65% to USD 87.3 million (2010: USD 248.3 million)
(1) Foreign exchange losses of USD 373.1 million less USD 70 million of realised losses in R&M India which was offset by higher GRM
(2) See pages 15 and 16 for a definition of EBITDA and CP EBITDA. Note CP EBITDA presented above is on a Group wide basis
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