Essar Oil returned to black with a net profit of Rs 32 crore in the December quarter and has received the Reserve Bank of India's (RBI) approval to raise $2.2 billion foreign currency loans to refinance expensive rupee debt.
"Net profit in October-December quarter at Rs 32 crore compared to Rs 362 crore of loss in the same period a year ago," company Managing Director & CEO Lalit K Gupta said in a media conference call from Mumbai.
The profit was mainly due to higher refining margin and larger processing of ultra heavy crude oil.
Essar's Vadinar refinery in Gujarat earned $9.75 on turning every barrel of crude oil into fuel in the third quarter as against a gross refining margin of $2.82 per barrel in the same period a year ago.
This "reflected the higher complexity benefits post completion of expansion and optimistion projects," Gupta said.
Sales were up 86 per cent to Rs 25,909 crore and in the first nine months the company has clocked a revenue of Rs 71,040 crore.
Gupta said the turnover will touch Rs 100,000 crore "next fiscal if not in the current financial year".
The Vadinar refinery, at 20 million tons per annum capacity and 11.8 complexity, is India's second largest single site refinery and among the most complex globally for a facility of this scale.
During the quarter, it processed 5.14 million tons of crude, up 83 per cent from last year.
"Share of ultra heavy crude in the refinery's crude diet rose almost three fold to 67 per cent and production of valuable middle and light distillates (LPG, petrol and diesel) improved to 85 per cent of the refinery's product slate from 69 per cent over the same period last year." he said.
"Heavy and ultra heavy crude constituted 84 per cent of the refinery's crude diet during the quarter, against 74 per cent in Q3FY12".
Gupta said going forward, the company will continue to "optimise crude diet and product slate further to improve our earnings."
Essar Oil, India's second largest private oil refiner, plans to raise around $2.2 billion in external commercial borrowings (ECB) to refinance part of rupee loans totalling Rs 17,700 crore.
Company CFO Suresh Jain said Essar Oil had received Reserve Bank of India approval to raise ECBs of $2.2 billion. The foreign currency debt would help the company save $140-150 million, he said.
"We are in discussion with banks," he said refusing to say when the company plans to raise the ECBs.