The
Board of Directors of HELLENIC PETROLEUM approved today the Group’s
consolidated financial statements of 1Q15. A positive set of results driven by
strong benchmark refining margins, increased exports and improved performance
of all business units, both in Greece and abroad.
It is also noted that business environment, both in the
Greek and global oil market remain volatile and with significant challenges and
risks for the rest of the year. The aim of the new Management team is to continue
strengthening the position of ELPE as a regional group in Southeastern Europe
and further enhance its performance and contribution to the Greek economy.
“With
regards to the recent tragic incident at the Aspropyrgos refinery, management expressed
the sympathy and support of the Company to the families of those affected and
reiterated the importance of safety during both operation and maintenance
works, requesting personnel, contractors and associates to contribute to this
effort.
The BoD of
HELLENIC PETROLEUM following the incident of 8 May 2015, stated that it has
already taken and will continue implementing all the necessary measures to
avoid any similar events as human life is invaluable and its protection cannot
be compromised.”
Favorable refining environment: Stabilization of crude oil price,
improved European benchmark refining margins and further strengthening of
dollar vs euro
During the
first quarter of 2015, global oil products demand increased, driven by, amongst
others, low crude oil price, economic recovery in several countries and colder
weather conditions in the Northern Hemisphere. As a result, crude oil price
decline slowed, with Brent averaging $54/bbl during the quarter.
US dollar
strengthened further vs euro, averaging $1.13 in 1Q15, its highest since 2003.
Benchmark
refining margins were stronger during this quarter, mainly on the back of
increased products demand in Europe, low energy costs due to reduced crude
prices and improved supply conditions of feedstock. Benchmark Med FCC margin averaged $6.8/bbl (1Q14:
$2.2/bbl), the highest first quarter level in the last 2 decades, while Hydrocracking
margin was at $7.2/bbl (1Q14: $3.4/bbl).
Greek market: Fuels demand growth driven by increased heating gasoil
consumption
Weather
conditions, lower international prices and lower effective taxation on heating
gasoil due to excise duty reduction and improved subsidization mechanism, led
to doubling of the demand for heating gasoil, with domestic fuels demand
increasing by 22%, to 1.9 million tonnes. Auto fuels demand remained stable at
last year’s level.
Financial results and main business developments
Group
Adjusted EBITDA, which reflects operational profitability,
came
in
at €205m, mainly on the back of Refining performance, while Adjusted
Net Income amounted to €55m.
Reported IFRS
results were also positive, despite an inventory loss of €49m, leading 1Q15
Reported EBITDA to €155m and Net Income to €18m.
Operating
cashflow was affected by increased working capital requirements ahead of the
scheduled full turnaround of Aspropyrgos refinery in 2Q15 and increased
inventory on contango trading. Net debt came at €2.1bn, lower than last year,
while gearing stood at 54%. Despite
improving operating cashflow during the last few quarters, Greek liquidity
issues continue to negatively affect the Group’s financial position and
expenses.
The
completion of the full turnaround of Aspropyrgos refinery and the gradual
start-up of the units is expected
in
June.
Furthermore, maintenance works (mainly decoking) are also carried out at the
flexicoker unit of Elefsina refinery.
Works are expected to be
completed within 5-6 weeks while all other refinery units are running according
to plan.
Regarding
the
sale of
66% of DESFA share capital to SOCAR, the regulatory approval is in progress,
with the approval of the European Competition Authorities being the final step
for the completion of the regulatory clearance.
Exploration activities in the West Patraikos Gulf area
are in progress, with focus being at this stage on geological studies. It
should be noted that HELLENIC PETROLEUM acts as operator in an international
JV.
Key highlights and contribution for each of the main
business units in 1Q15 were:
REFINING, SUPPLY & TRADING
Domestic
Refining, Supply & Trading 1Q15 Adjusted EBITDA at €173m, with production
at 4 million tonnes.
Domestic
market sales increased by 25%, mainly due to increased demand for heating
gasoil and market share gains in key products, while exports reached 1.9
million tonnes, up by
40%,
leading total sales to 3.6 million tonnes (+30%).
PETROCHEMICALS
International
PP margins led Adjusted EBITDA to €19m. Maintenance works at the Aspropyrgos
refinery are expected to provide further opportunities for vertical supply and
value chain integration with refining.
DOMESTIC MARKETING
Domestic
Marketing sales volumes were 31% higher, mainly driven by heating gasoil,
leading 1Q15 Adjusted EBITDA to €4m.
Improvement
in market shares continued, with the strategic management of our network and
development of the differentiated product portfolio yielding significant
benefits.
INTERNATIONAL MARKETING
International
Marketing sales volumes increased by 8%, as lower product price environment
increased market demand; most of the incremental volume was sourced from the
Group’s refineries.
Adjusted
EBITDA came in at €10m.
ASSOCIATED COMPANIES
DEPA Group
contribution to consolidated Net Income amounted to €10m, due to weak demand
from gas-fired electricity generators and industrial customers, despite an
increase in EPA’s sales volumes.
Elpedison
EBITDA at €-1m, as the transitional regulatory framework had a significant
impact on production and profitability.
Key
consolidated financial indicators (prepared in accordance with IFRS) for 1Q15 are
shown below:
€ million
|
|
|
|
1Q14
|
1Q15
|
% Δ
|
P&L figures
|
|
|
|
|
|
|
Refining Sales Volumes (‘000 ΜΤ)
|
|
|
|
2,790
|
3,616
|
30%
|
Sales
|
|
|
|
2,077
|
1,879
|
-9%
|
EBITDA
|
|
|
|
25
|
155
|
-
|
Adjusted EBITDA 1
|
|
|
|
51
|
205
|
-
|
Net Income
|
|
|
|
(38)
|
18
|
-
|
Adjusted Net Income 1
|
|
|
|
(19)
|
55
|
-
|
Balance Sheet
Items
|
|
|
|
|
|
|
Capital Employed
|
|
|
|
4,505
|
3,836
|
-15%
|
Net Debt
|
|
|
|
2,333
|
2,085
|
-11%
|
Debt Gearing (ND/ND+E)
|
|
|
|
52%
|
54%
|
-
|
1. Calculated as Reported adjusted
for inventory effects and other non-operating items.
Note:
Founded in 1998, Hellenic Petroleum is one of
the leading energy groups in South East Europe, with activities spanning across
the energy value chain and
presence in 7 countries.