Essar Oil Ltd reported a net loss of Rs 863 crore for the first quarter ended June due to huge forex losses arising out of around 10 per cent rupee depreciation during the quarter. This loss was, however, lower compared to loss of Rs 1,518 crore in the year-ago period on the back of improved gross refining margins (GRM).
The company accounted for a realised forex loss of Rs 221 crore in the quarter and a mark-to-market forex loss of Rs 692 crore. On the other hand, it saw a rise in GRMs to $7.01 a barrel from $4.69 a barrel due to increase in proportion of cheaper heavy and sour crude. This helped boost the company’s operating margins. GRM is the differential between the cost of a barrel of crude oil and the price at which its processed output can be sold. Most of the forex losses were over overseas liabilities, and forex swaps and hedges, which could be recovered, according to CFO Suresh Jain.
“Our PAT has been negatively impacted by the MTM forex losses. But we hope to recover the losses through sales or GRMs by this quarter or the next,” he added.
Revenue rose 12 per cent on a year-on-year basis to Rs 24,721 crore aided by a 15 per cent growth in refinery throughput to 5.14 million tonnes. In the upstream business, the company said it is currently producing around 100,000 cubic metres gas per day from its coal bed methane block in Raniganj. It is targeting output of 3 mscmd (million standard cubic metres per day) in the next financial year.
Shares today rose 4.96 per cent from its previous close to close at Rs 60.35 on the BSE.