Essar Energy shares fall 10% on 2011 loss

 

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Shares in India's Essar Energy have slumped more than 10% after the company reported an after-tax loss for 2011.

The company made a loss of $568m (£358m) for the calendar year, compared with a profit of $248m in 2010.

It said 2011 had been a "challenging" year, with lower refining margins and a weaker rupee hitting profits towards the end of the year.

Essar also highlighted government delays in granting permits to start mining coal blocks.

In January, the Supreme Court in India ruled that the company could not defer tax payments.

The court ruled that Essar Oil, which is majority owned by Essar Energy, was not be able to defer $1.24bn in sales tax on refined oil products.

This overturned a lower court's ruling that allowed the company to defer the payment to Gujurat state.

"We were clearly disappointed that the Supreme Court of India set aside an earlier decision of the High Court of Gujarat which enabled us to benefit from a sales tax deferment scheme," said Essar Energy's chief executive Naresh Nayyar in the results statement.

"We are seeking a review of this decision."

Essar Energy, which listed on the London Stock Exchange in 2010, is owned by the Indian conglomerate Essar Group and is aiming to profit from India's growing demand for energy.

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