Italy's Saras moves to bolster cash position as refining crisis drags on

MILAN (Reuters) - Italy's Saras SRS.MI said on Wednesday it is talking to banks to strengthen its liquidity position after swinging to an operating loss and pushing refining recovery to the second half of next year.

Saras, whose main shareholder is the Moratti family, said it recorded a comparable core earnings loss of 61.5 million euros (55.4 million pounds) in the third quarter, from a 125.7 million euro profit a year earlier.

Like its peers Saras, which runs the 300,000 barrel per day Sarroch refinery in south-western Sardinia, is struggling with an unprecedented collapse in energy consumption following the health pandemic.

“In this unprecedented and challenging environment, Saras has established an important plan to reduce investments and operating costs,” Chairman Massimo Moratti said, adding for the first time ever it was using a temporary lay-off scheme.

The refiner said its net financial position, negative to the tune of 413 million euros at the end of September, had been dented by lack of profitability, adding it could suffer more in view of low margins expected in the final quarter.

To reduce the group’s liquidity risk and contain fallout from the economic crisis, it said it was working to complete talks with banks to strengthen credit lines and review some financial parameters on existing lines.

In October Saras shares soared after global commodity trader Trafigura said it bought a stake of 3%, fuelling talk its main shareholder was looking for a partner.

Reporting by Stephen Jewkes, editing by Giulia Segreti and Emelia Sithole-Matarise