India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Essar Oil
F1Q12 –GRMs weaker, tax
credit boosts bottom-line
Quick Comment: Essar Oil reported F1Q12 EBITDA of
Rs8.7bn (+117% YoY, -2% QoQ), which was 16% below
our estimate of Rs8.8bn due mainly to lower-than-
expected GRMs. However, reported PAT of Rs4.7bn
was in line with estimates as the company booked
Rs1.66bn in MAT tax credit related to prior years.
Adjusting for this, PAT was 33% below our forecast.
Lower-than-expected GRMs: Essar Oil reported
GRMs at US$7.4/bbl (incl. sales tax benefit), down 9%
QoQ, which were US$2/bbl below our expectation.
Adjusting for sales tax advantage of US$3.2/bbl, pure
GRMs stand at US$4.2/bbl, implying a negative spread
of US$4.4/bbl over Singapore complex. We believe that
a worsening product slate (higher Fuel Oil output) could
have contributed to weaker GRMs as heavy output
increased by 2-percentage point during the quarter.
Key takeaways from the analyst meeting:
Refinery Phase 1 expansion to 18MT is on track, and
mechanical completion is targeted in a phased-in
manner in C3Q11. However, commissioning of the
coker unit is deferred to Dec-11. Essar will shut its
refinery for 35 days during Sep-Oct to complete the
revamp and carry out the tie-in jobs for the expansion
units. Further optimization to 20MT is also on track with
completion target by Sep-2012.
Post expansion GRMs to be substantially higher
than current levels: Based on simulation results, Essar
Oil believes completion of the project upgrade can add
US$4-5/bbl to current GRMs.
Raniganj CBM Development on track; however no
clarity on Ratna PSC yet. Raniganj is producing
0.33mmscm, however, commercial production is
targeted in coming months post government approvals.
There is no clarity on the timeline of signing of Ratna
PSC as yet, as management is unsure when the
government will approve the signing of the Ratna PSC.
No comments:
Post a Comment