Key figures for the 1Η
and 2
Q
period to
30 June 2010
are:
·
Adjusted EBITDA 1H10:
€306m (1H091: €236m)
2Q10: €183m (2Q091:
€109m)
·
EBITDA 1H10:
€292m (1H10: €251m)
2Q10: €142m
(2Q09: €159m)
·
Adjusted Net Income
1H10: €103m (1H091:
€121m)
2Q10: €60m (2Q091: €65m)
·
Net Income
1H10: €59m (1H09: €141m)
2Q10: €16m (2Q09:
€106m)
·
EPS
1H10: €0.19 (1H09: €0.46)
2Q10: €0.05 (2Q09: €0.35)
Note:
1. Last
year comparatives adjusted to include Hellenic Fuels results
GROUP
Despite the adverse macroeconomic environment and weak
local market conditions, the Group reported a 'strong set of results' for the
second quarter and first half of 2010. The positive results are mainly due to Refining,
Supply and Trading which benefited from improved international benchmark
refining margins, a stronger USD and the impact of a series of cost control
measures initiated over the last 18 months. Retail business on the other hand,
suffered in 2Q as expected from lower commercial & industrial fuels demand
and the impact of increased excise taxes on auto fuel products.
Note that 1H10 net profits have been adversely affected
by the special income tax contribution on 2009 results (amounting to €26m for
the Group and €7m from our participation in DEPA), by inventory losses of €8m
(compared to gains of €75m in 1H09), as well as FX losses of €66m (vs gains of
€3m in 1H09) stemming from the recent short term spike of the USD vs the Euro.
Upgrade projects for Elefsina and
Thessaloniki
refineries are progressing as scheduled and within
budget
.
Specifically, the
Thessaloniki
refinery is scheduled for mechanical completion
before the end of 2010 with the refinery shutting down for a planned
maintenance and tie-ins in 1Q 2011. Elefsina upgrade is well into the phase of
construction and erection and is due for completion in 2H11. In addition to the
investment program, the Group will benefit from the transformation plans which
are aimed to generate over €100m of annual cash benefits. In terms of Balance
sheet, given the Group’s strong financial position, a major advantage in the
wake of recent market developments, and through long term planning and
consistent implementation, all required resources to support the strategic
investment plans are available. In particular, at the end of June Net Debt
amounted to €1.8bn with
Net
Debt/Capital Employed of 43%, in line with our plans.
Based on half year results, the Board of Directors
approved the distribution of a flat y-o-y interim dividend per share of €0.15
for the fiscal year ending
31 December 2010
.
Key highlights and contribution for each of the main
business units were:
REFINING, SUPPLY & TRADING
Domestic
market sales volume declined by 11%, driven mainly by lower heating gasoil
sales (1Q), the impact of the financial crisis on commercial and industrial
fuel sales (2Q) and the increased excise taxes on auto fuels (2Q).
Improved
refining margins, particularly in 2Q due to increased middle distillate cracks
and the effect of the stronger USD on realised margins.
DOMESTIC MARKETING
Greek
marketing subsidiaries, EKO and Hellenic Fuels, 2Q results were negatively
affected by the adverse environment which led to lower sales volume and
depressed margins.
The
integration of Hellenic Fuels business progressed well with logistics and
supply chain benefits offsetting part of the negative volume and margin
pressures.
INTERNATIONAL MARKETING
Increased
profitability mainly due to the improved performance of our operations in
Bulgaria
and
Serbia
. A key element of
the
improved performance is the
increase in average profit margins in most markets.
PETROCHEMICALS
Significant
improvement in profitability (EBITDA
reached
€29m from €9m in 1H09), mainly due to increased polypropylene margins.
Global
industry conditions have rebounded from last year’s lows positively affecting
our large export business, however demand in the Greek market remains weak.
ASSOCIATED COMPANIES
While the long
term outlook remains positive, weaker electricity market and structural issues
present a short-term challenge for independent power producers such as
ELPEDISON. 2Q results are marginally positive at EBITDA level while
consolidated net results for the joint venture report a small loss. ELPEDISON second
gas-fired power generation unit in Thisvi has been completed and the plant is
expected to be commissioned in 2H10, as originally planned.
DEPA’s
contribution to Group’s results was negative in 2Q as a result of providing for recently imposed
special income tax on the Group’s consolidated results for 2009.