OREANDA-NEWS. Results highlights: Sharp increase in current price EBITDA (CP EBITDA1) showing benefits of new projects

Group revenue in FY 2013 of USD 27.3 bn (15 months FY2012: USD 22.0bn2), up 24%, driven by higher refining volumes at R&M India (Vadinar) and a full 12 months contribution from R&M UK (Stanlow)

Group CP EBITDA1 in FY 2013 of USD 1,335.5 mn (15 months FY2012: USD 484.5 mn), up 176% mainly due to increased margins and throughput at the Vadinar refinery, improved margins at the Stanlow refinery and increased throughput at Stanlow due to a full 12 months contribution

CP profit before tax of USD 367.7 mn (15months FY2012: loss of USD 103.6 mn) as higher CP EBITDA was offset by increased interest and depreciation costs as projects moved into operations

Loss before tax of USD 163.2 mn (15 months FY2012: loss of USD 1,147.7 mn), as higher operational EBITDA was offset by higher interest and depreciation costs as projects moved into operations

(USD million)

12 months ended 31 March 2013

15 months ended 31 March 2012

Change %

Operational EBITDA1

1,068.1

686.8

56%

CP EBITDA1

1,335.5

484.5

176%

CP profit/(loss) before tax

367.7

(103.6)

455%

Loss before tax (before exceptional items and sales tax benefit in 2012 )

(163.2)

(166.1)

2%

Exceptional items

-

(1,276.7)

-

Sales tax benefit

-

295.1

-

Loss before tax

(163.2)

(1,147.7)

86%

Loss after tax (before exceptional items and sales tax benefit in 2012)

(175.0)

(101.2)

-73%

Loss after tax (after exceptional items and sales tax benefit in 2012)

(175.0)

(764.3)

77%

Capital expenditure

1,193.3

2,760.6

-57%

Balance sheet (USD million)

As at 31 March 2013

As at 31 March 2012

Change %

Net debt (underlying)3

6,740.8

6,273.0

7%

Total equity

6,740.8

3,646.5

-10%

Gearing (net debt (underlying)/(net debt (underlying) + total equity)

67.2%

63.2%

Divisional highlights

Oil and gas: Margin improvements delivered at Vadinar and Stanlow refineries

Vadinar Current Price Gross Refinery Margins (CP GRM) increased 79% to USD 7.96/bbl in FY 2013 against USD 4.45/bbl (excluding sales tax benefit) in 15 months FY 2012 and Vadinar throughput increased 16% to 19.77 mmt (140.3 mn bbls) in FY 2013 against 17.1 mmt (125 mn bbls) in 15 months FY 2012, both due to completion of the refinery upgrade

R&M India CP EBITDA1 increased 252% to USD 823.8 mn in FY 2013 from USD 234.2 mn in FY 2012

Stanlow CP GRM increased 141% to USD 7.38/bbl in FY 2013 against USD 3.06/bbl in FY 2012 due to improved market conditions and margin enhancement benefits

R&M UK CP EBITDA1 increased to USD 317.2 mn in FY 2013 from USD 12.8 mn in FY 2012 (first eight months of ownership)

Margins at Stanlow have been improved by USD 2.2/bbl since acquisition. This is ahead of schedule and delivered a USD 1.2/bbl average benefit during FY 2013

Increased Stanlow margin improvement target; from USD 3/bbl to USD 4/bbl by end FY 2015

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 3,910MW from 1,600 MW at the end of FY 2012 (including 600MW unit 1 of Mahan, which was synchronised during the year)

Generation output increased 27% to 10,017 MU in FY 2013 from 7,907 MU in FY 2012

Power business operational EBITDA2 increased 5% to USD 224.7 mn in FY 2013 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

USD 481 mn 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 USD 1.5 bn

Rs.6.29 bn bond (c.USD 114 mn) 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

Mr 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," added Mr Nayyar.

NB. Essar Energy's financial year changed to a March year end from 31 March 2012, from December previously.

1 See pages 13 and 14 for a definition of Operational EBITDA and CP EBITDA. Note CP EBITDA presented above is on a Group-wide basis. Operational EBITDA is before other losses (see page 13) and excludes sales tax benefit and exceptional items.

2 Revenue before adjustment for loss of sales tax benefit.

3 See page 16 for a definition of Net debt (underlying).