India-based Essar Energy, a subsidiary of family-owned Essar Group, released half-year results showing a profit before tax of $154.4million, a decrease from $233.6million in the same period a year ago.
However, second-generation Prashant Ruia, vice chairman of Essar Energy, said: "In terms of the actual results of the company we have been more or less in line with our projections. On the refining side, production has totalled 7.2 billion tonnes which has been a record."
Ruia declared that the first six months had been exceptional as Essar Energy raised £1.19 billion in an IPO on the London Stock Exchange and entered the FTSE 100.
In spite of the decrease in profit, the company has continued to make big progress with its plans to increase its operating capacity from 1,220 MW currently to 11,470 MW by the end of 2014.
The company currently has 16 projects under development. Essar Energy spent £1billion on capital expenditure in the first half of 2010.
The group has also said it is looking for acquisitions. In March 2010 the group purchased the US-based Trinity Coal Partners LLC for $600million. (Continue reading here)
Commenting on India's development, Ruia argues, "India is at a very early stage of its development, on any index which you see, we are currently a fifth or a sixth of demand of where China is today. One of the areas, which we as Essar Energy are focused on meeting, is this power deficit."
When asked how the deregulation of gas in India has affected Essar, chief executive Naresh Nayar revealed that the deregulation of gas had made a positive effect on Essar and that he now saw a huge opportunity for private sectors to capture the market.
The group, which Shashi and Ravi Ruia founded in 1969, has revenues of $15 billion and has interests in steel, energy, power, minerals, telecoms, and shipping. The family still owns a majority share in all the group's subsidiary companies and the six-member board is made up entirely of first and second-generation family members.
Picture: An Essar refinery in India
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