Essar Energy - refining behaviour Is that a turnround off in the distance? Essar Energy, the growth story that failed to show up, has struggled to make the leap from project to producer. Since listing in London in 2010 the Anglo-Indian power and refining group's shares have tumbled 70 per cent after operational delays, a tax hit in India and bureaucratic setbacks. Monday's first-half results show that earnings before interest, tax, depreciation and amortisation when, fluctuations to the oil price and foreign exchange swings are stripped out, roughly doubled. So Essar's expensive UK and Indian projects are producing cash and earnings. About time. Essar has been a projects-based company for several years: the London listing was predicated on its shift to energy production, a process that is taking longer than expected. There are signs that it is starting to bear fruit - the $5bn upgrading of the Vadinar refinery in India has helped margins there roughly double, while the acquisition of the Stanlow refinery in the UK boosted group revenue to $13.5bn, split 60/40 between India and the UK. Refining margins are riding high following the collapse a year ago of Petroplus, Europe's biggest independent refiner by capacity. Those margins may not be sustainable given the continued chronic oversupply of refining capacity in Europe. But Essar should benefit as long as they last. The most burdensome legacy of Essar's growth phase is net debt of nearly $7bn, which is twice its total equity. And the debt may not yet have peaked given that its Indian projects, especially the Mahan power plant, are not fully operational. The group will need to extract every cent of its expected $900m boost to ebitda from the higher refining margins, and more efficient and modernised plants at Vadinar and Stanlow. Until it shows that it can do so, Essar will remain the growth story that failed to show up.