Essar Energy suffers profits dive on price wobble

Essar Energy, the Indian power group that raised £1.3 billion when it floated on the London Stock Exchange in May, today blamed a fall in the value of its oil inventory for first-half pre-tax profit dropping 34% to £154 million.

But it downplayed the impact of the drop, saying it was mainly due to fluctuating oil prices.

Essar said higher rates last year had raised the value of its stockpile of oil, which fell in the first half of this year.

Revenue came in two thirds higher, at £4.76 billion. Also today, the firm made the announcement that its interim finance director Gerry Bacon, who had only been in the post since April, is quitting.

Bacon, a former finance officer at Vodafone, said he was returning to return to work in academia.

He will be replaced by P Sampath, who is being promoted from his position as chief financial officer of the oil division.

The firm, which owns power plants all over India and also carries out oil and gas exploration, said it was still locked in talks with Royal Dutch Shell about buying refineries in Stanlow in the UK as well as two other sites in Germany.