H1 FY18 (September ending) highlights
Essar Oil (UK) Limited, which owns and operates the Stanlow Refinery, today announced record figures for the first six months of the financial year ending March 31st 2018.
Operational and financial performance: Key Indicators
September ending
H1 FY18
H1 FY17
Growth
Throughput (in MMT)
4.5
0%
Gross Revenue (in $m)
2,700
2,292
+18%
Current Price Gross
Refining Margin ($/bbl)
11.0
7.6
+45%
EBITDA (in $m)
264
118
+124%
Profit after Tax (in $m)
169
51
+231%
The continuing Essar success story at Stanlow
The refinery, which as a key national asset produces 16% of the UK’s road transport fuel demand, processed 4.5 MMT of crude, in line with the 4.5 MMT during H1 FY17.
Essar Oil UK continues to make good progress on its plans to invest $250 million in capex and maintenance at Stanlow in FY18 to ramp up throughput, improve yields and drive revenues. This major investment will increase annual throughput from 68 million to 75 million barrels.
A focus on margin booster initiatives and cost efficiencies has seen a significant improvement in the operating and financial performance during this time. In FY15 Stanlow was reconfigured and optimised to a single train operation which increased the yield of high margin products such as gasoline and middle distillates.
In addition, the crude slate has been materially diversified with the introduction of many new grades, including four new grades in the past six months.
These major initiatives have resulted in a latest half yearly delta over the benchmark margin of $4.8/bbl, as against under $1/bbl in 2012.
Essar Oil UK Non-Executive Chairman, Prashant Ruia, said: “The Stanlow refinery is a core sector asset of national importance for the UK and we are extremely happy that it has been delivering consistently robust performance. Essar is committed to the growth of the UK’s Oil & Gas economy. We have invested more than $800 million in the Stanlow Refinery since acquisition towards improving environment standards and safety performance, improving product yields, and driving further upside by increasing throughput and unit margins. We have now started reaping the benefits of this investment.”
Essar Oil UK Chief Executive Officer, S. Thangapandian, commented: “A strong operational performance, supported by product cracks has enabled us to post record figures for a half year period and again improve our delta over the benchmark margin. To further develop the Essar Oil UK business, we continued the roll-out our UK retail network, grew the direct supply of aviation fuel to major airlines and have started leasing storage in Rotterdam, together with blending and jetty infrastructure, in order to cater to gasoline export markets directly. With the strong focus on Health and Safety across our entire organisation, we look forward to delivering a safe and successful Turnaround in 2018 and completion of Project Tiger Cub which will increase throughput, reduce crude costs and drive revenue growth.”
Essar Oil UK Chief Financial Officer, Sampath P, said: “These are impressive operating and financial results for a half year and the EBITDA generated during the first six month period have already reached our business plan target for the entire fiscal. The company is in a strong financial position to fulfil its commitment to significant further investment of $250 million at Stanlow for the completion of the Tiger Cub project and block Turnaround in 2018.”
