Essar Energy beats forecasts but project delays hit shares

INDIA-FOCUSED power generator and refiner Essar Energy posted a forecast-beating 28 per cent rise in pre-tax profit to $365.5m (£224m) yesterday, in its first full-year results since raising £1.1bn in a London float last May.

Its FTSE 100-listed shares fell 7.3 per cent, however, as it admitted that three power plants in India have been delayed by around three months thanks to heavy rains in the country during monsoon season.

Essar Energy aims to bring 2,910 megawatts of power capacity from the three plants online during 2011, and continue work on 8,000 megawatts-worth of new projects to cash in on surging energy demands in India.

Revenues rose 42 per cent to $10bn on higher refining margins and new energy tariffs in its main market.

The firm shelled out $2.56bn in capital spending in 2010, in one of the biggest infrastructure investment programmes in the country.

Vice chairman Prashant Ruia told City A.M. yesterday the firm will focus on completing new projects rather than big buys this year. The firm is not looking to snap up any more Royal Dutch Shell assets after its £215m Stanlow plant acquisition closes later this year – nor will Essar get involved in BP’s $30bn asset sale, he said.