London, January 28th 2016: Essar Oil (UK) Limited, which owns and operates the Stanlow Refinery, today announced its best ever performance for the first nine months of a Financial Year, for the year ending March 31st 2016.
In the nine months to December 31st, 2015, Stanlow, which produces about 15% of the UK’s road transport fuel demand, processed 6.77 MMT of crude, a 7% increase on the previous year’s 6.35 MMT.
Gross revenues for the period stood at $4,041 million, a 35% drop to the $6,257 million reported in FY15, largely due to the lower crude oil price which fell 52% year on year average.
EBITDA was a record $304 million for a nine month period, against $126.7 million reported in FY15.
Profit after Tax (PAT) was its highest ever at $179 million, against $35.3 million in FY15.
Essar Oil UK reported its best ever Current Price Hydrocarbon Margin (CP HCM) at $10.1/bbl, a 20% increase to the $8.4/bbl reported in FY15, primarily due to refinery reconfiguration and improved benchmark margins.
Stanlow again saw the benefits of operating as an optimised single train site, which has increased the yield of high margin products such as gasoline and middle distillates and also reduced production of lower margin products such as fuel oil and naphtha.
Stanlow, since Essar’s acquisition, has improved its CP GRM from NWE+2 $/bbl to NWE +5 $/bbl and is a value accretive acquisition for Essar.
Essar entered the UK retail market, with its first and second Essar branded service stations opening in Coalville, Leicestershire and Walkden, Manchester respectively. A third site in Middleton, Lancashire was unveiled in January 2016.
Product availability to customers was again 100%. This continued the excellent performance seen across the entire 12 months of FY15 where 100% availability significantly contributed to energy supply security in the North West of the UK.
Essar Oil UK Executive Chairman, Naresh Nayyar, commented: “This is a strong performance which reflected the many margin improvement projects undertaken by Essar at Stanlow. We are seeing the benefits of running as a single train optimised site, with robust operational delivery enabling us to take advantage of a supportive market environment. We continue to focus on further widening our crude slate to capture additional value, which has recently seen the processing of high pour point grades. I am also pleased to see our entry to the UK retail market with Essar branded service stations and look forward to substantially more sites opening over the next few years.”
Essar Oil UK Chief Financial Officer, Sampath P, said: “Our EBITDA and PAT are both record figures for a nine month period since Essar acquired Stanlow in 2011 and have been supported by strong product cracks. The business is in a healthy financial position, with no long term debt and ongoing margin improvement plans in place to deliver an even stronger bottom line.”
First nine months
Q3FY16
Q3FY15
Growth
YTDFY16
YTDFY15
Throughput (in MMT)
2.27
2.29
(1%)
6.77
6.35
7%
Gross Revenue (in $m)
1,090
1,767
(38%)
4,041
6,257
(35%)
CP HCM (in $/bbl)
8.1
8.8
(8%)
10.1
8.4
20%
EBITDA (in $m)
72
41.7
73%
304
126.7
140%
Profit after Tax (in $m)
35
9.1
285%
179
35.3
407%
Since acquiring Stanlow, Essar has successfully reconfigured the refinery to operate as a single train highly optimised site. Robust operational performance in YTD FY16 has delivered a number of notable landmarks including the highest ever monthly amount of residue being upgraded via Europe’s largest Cat Cracker, highest monthly throughput in the HDS2 upgrading unit and record daily production of high value propylene.
Essar has extensive experience in the Indian retail market and has now entered the UK retail sector with the clear ambition of building a network on a scale that befits a UK refinery owner and ultimately a nationally recognised brand. A dedicated retail development team is in place, which has seen three Essar branded sites already open and ambitious plans to further grow the business.
