London-listed Essar Energy plc., on Monday, reported a pre-tax loss of $1.14 billion for 15 months to March 31, 2012, weighed down by the Supreme Court ruling on payment of local sales tax, against a pre-tax profit of $365.5 million in the 12 months to December 31, 2010. The Supreme Court earlier this year ruled that the company was liable to pay $1.2 billion in taxes.
The swing into the red came in spite of Essar’s revenues more than doubling from $10 billion in 2010 to $21.96 billion for the 15-month period, on the back of higher selling prices and U.K.’s Stanlow refinery acquisitions.
Naresh Nayyar, Chief Executive Officer, said: “We are now very much an operational energy business, with many construction projects completed and our capex programme having peaked.”
“Coupled with our low cost base, this will permit a step change in margins. We are also making good headway at our Stanlow refinery with a number of initiatives to improve margins by at least $2 a barrel over the next 18 months,” he said.
Looking ahead, the company expects its margins to remain volatile throughout 2012, with ongoing weak growth in the Western world, but sees strong demand in Asia.
Essar Energy said a 14 per cent depreciation of rupee against the U.S. dollar during the 15-month period resulted in an overall forex impact of $317 million on adjusted pre-tax profit, including revaluation impact and other forex losses of $243.2 million.
