By Adam L. Freeman and Gianluca Baratti
Nov. 14 (Bloomberg) -- ERG SpA, Italy's biggest exporter of oil products, said third-quarter profit more than tripled as refining margins widened on increased demand for diesel.
Net income excluding inventory changes rose to 40 million euros ($51 million) from 12 million euros a year earlier, the Genoa-based company said today in a statement distributed by the Italian stock exchange.
Refining earnings before interest, tax, depreciation and amortization grew 38 percent as the company increased operating rates and charged higher prices for fuels at the pump.
ERG rose as much as 68 cents, or 6.1 percent, to 11.78 euros in Milan trading, and was at 11.69 euros as of 9:19 a.m. local time, valuing the company at 1.76 billion euros.
ERG's largest asset, the 398,000-barrel-a-day Priolo refinery complex on the island of Sardinia, will become a joint venture with OAO Lukoil next month. The Russian company, which agreed on the deal in June, will pay ERG an initial 600 million euros on Dec. 1 and the remaining 750 million euros in three installments. It will hold 49 percent while ERG will own the rest.
One unit at ERG's ISAB power station at Priolo, amounting to 50 percent of the plant's capacity, will probably remain off line through next year, the company said in today's statement. It expects to start the other train by January. ERG closed the power plant, which is fed by fuel residues, last month after one of the generation units caught fire.
To contact the reporters on this story: Adam L. Freeman in Rome at afreeman5@bloomberg.net; Gianluca Baratti in Madrid gbaratti@bloomberg.net.
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