28th May 2015 16:07
PRESS RELEASE
28 May 2015
First quarter 2015 financial results |
Positive results on strong benchmark refining margins and
high exports
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 inat €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% | - |
Notes:
1. Calculated as Reported adjusted for inventory effects and other non-operating items.
Note to Editors:
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.
Further information:
V. Tsaitas, Investor Relations Officer
Tel.: +30-210-6302399
Email: [email protected]
E. Stranis, Group Corporate Affairs Director
Tel.: +30-210-6302241
Email: [email protected]
G. Stanitsas, Group Communications Director
Tel.: +30-210-6302197
Email: [email protected]
Group Consolidated Statement of Financial Position
As at | |||
Note | 31 March 2015 | 31 December 2014 | |
ASSETS | |||
Non-current assets | |||
Property, plant and equipment | 11 | 3.372.583 | 3.398.170 |
Intangible assets | 12 | 128.228 | 131.978 |
Investments in associates and joint ventures | 690.394 | 682.425 | |
Deferred income tax assets | 213.504 | 224.788 | |
Available-for-sale financial assets | 3 | 1.531 | 1.547 |
Loans, advances and other receivables | 88.509 | 86.698 | |
4.494.749 | 4.525.606 | ||
Current assets | |||
Inventories | 13 | 913.057 | 637.613 |
Trade and other receivables | 14 | 779.756 | 708.227 |
Cash, cash equivalents and restricted cash | 15 | 1.155.208 | 1.847.842 |
2.848.021 | 3.193.682 | ||
Total assets | 7.342.770 | 7.719.288 | |
EQUITY | |||
Share capital | 16 | 1.020.081 | 1.020.081 |
Reserves | 17 | 439.272 | 435.013 |
Retained Earnings | 181.337 | 163.048 | |
Capital and reserves attributable to owners of the parent | 1.640.690 | 1.618.142 | |
Non-controlling interests | 109.125 | 110.404 | |
Total equity | 1.749.815 | 1.728.546 | |
LIABILITIES | |||
Non-current liabilities | |||
Borrowings | 18 | 2.046.505 | 1.811.995 |
Deferred income tax liabilities | 40.555 | 40.953 | |
Retirement benefit obligations | 94.250 | 92.728 | |
Provisions for other liabilities and charges | 6.223 | 6.224 | |
Other long term liabilities | 20.882 | 21.861 | |
2.208.415 | 1.973.761 | ||
Current liabilities | |||
Trade and other payables | 19 | 2.120.237 | 2.679.199 |
Derivative financial instruments | 3 | 54.514 | 60.087 |
Current income tax liabilities | 13.503 | 34.901 | |
Borrowings | 18 | 1.195.139 | 1.177.645 |
Dividends payable | 1.147 | 65.149 | |
3.384.540 | 4.016.981 | ||
Total liabilities | 5.592.955 | 5.990.742 | |
Total equity and liabilities | 7.342.770 | 7.719.288 | |
Group Consolidated Statement of Comprehensive Income
For the three month period ended | |||
Note | 31 March 2015 | 31 March 2014 | |
Sales | 1.879.498 | 2.076.423 | |
Cost of sales | (1.670.215) | (1.997.461) | |
Gross profit | 209.283 | 78.962 | |
Selling and distribution expenses | (76.354) | (78.165) | |
Administrative expenses | (28.342) | (25.339) | |
Exploration and development expenses | (355) | (485) | |
Other operating income / (expenses) - net | 5 | 4.316 | 2.490 |
Operating profit / (loss) | 108.548 | (22.537) | |
Finance (expenses) / income - net | 6 | (49.870) | (52.855) |
Currency exchange gains / (losses) | 7 | (38.934) | 1.212 |
Share of net result of associates | 8 | 8.101 | 14.529 |
Profit / (loss) before income tax | 27.845 | (59.651) | |
Income tax (expense) / credit | 9 | (10.682) | 19.104 |
Profit / (loss) for the period | 17.163 | (40.547) | |
Other comprehensive income: | |||
Items that may be reclassified subsequently to profit or loss: | |||
Fair value gains/(losses) on available-for-sale financial assets | (15) | 35 | |
Fair value gains / (losses) on cash flow hedges | 17 | 4.124 | (2.438) |
Other movements and currency translation differences | (3) | 25 | |
4.106 | (2.378) | ||
Other comprehensive (loss) / income for the period, net of tax | 4.106 | (2.378) | |
Total comprehensive (loss) / income for the period | 21.269 | (42.925) | |
Profit attributable to: | |||
Owners of the parent | 18.289 | (37.844) | |
Non-controlling interests | (1.126) | (2.703) | |
17.163 | (40.547) | ||
Total comprehensive income attributable to: | |||
Owners of the parent | 22.548 | (40.129) | |
Non-controlling interests | (1.279) | (2.796) | |
21.269 | (42.925) | ||
Basic and diluted earnings per share(expressed in Euro per share) | 10 | 0,06 | (0,12) |
Group Consolidated Statement of Cash Flows
For the three month period ended | |||
Note | 31 March 2015 | 31 March 2014 | |
Cash flows from operating activities | |||
Cash generated from operations | 20 | (764.827) | (585.867) |
Income and other taxes paid | (15.101) | (1.795) | |
Net cash used in operating activities | (779.928) | (587.662) | |
Cash flows from investing activities | |||
Purchase of property, plant and equipment & intangible assets | (17.239) | (24.915) | |
Proceeds from disposal of property, plant and equipment & intangible assets | 78 | 67 | |
Interest received | 2.435 | 1.870 | |
Dividends received | 133 | - | |
Net cash used in investing activities | (14.593) | (22.978) | |
Cash flows from financing activities | |||
Interest paid | (46.200) | (33.457) | |
Dividends paid to shareholders of the Company | (64.002) | (11) | |
Proceeds from borrowings | 215.574 | 80.920 | |
Repayments of borrowings | (10.945) | (52.939) | |
Net cash generated from / (used in) financing activities | 94.427 | (5.487) | |
Net (decrease) / increase in cash, cash equivalents and restricted cash | (700.094) | (616.127) | |
Cash,cash equivalents and restricted cash at the beginning of the period | 15 | 1.847.842 | 959.602 |
Exchange gains / (losses) on cash, cash equivalents and restricted cash | 7.460 | 423 | |
Net (decrease) / increase in cash, cash equivalents and restricted cash | (700.094) | (616.127) | |
Cash, cash equivalents and restricted cash at end of the period | 15 | 1.155.208 | 343.898 |
Parent Company Statement of Financial Position
As at | |||
Note | 31 March 2015 | 31 December 2014 | |
ASSETS | |||
Non-current assets | |||
Property, plant and equipment | 10 | 2.751.580 | 2.767.874 |
Intangible assets | 11 | 10.627 | 11.477 |
Investments in subsidiaries, associates and joint ventures | 659.826 | 659.826 | |
Deferred income tax assets | 163.161 | 174.573 | |
Available-for-sale financial assets | 50 | 50 | |
Loans, advances and long-term assets | 18.765 | 142.980 | |
3.604.009 | 3.756.780 | ||
Current assets | |||
Inventories | 12 | 826.919 | 543.783 |
Trade and other receivables | 13 | 1.116.023 | 899.057 |
Cash, cash equivalents and restricted cash | 14 | 782.823 | 1.593.262 |
2.725.765 | 3.036.102 | ||
Total assets | 6.329.774 | 6.792.882 | |
EQUITY | |||
Share capital | 15 | 1.020.081 | 1.020.081 |
Reserves | 16 | 434.117 | 429.994 |
Retained Earnings | (252.732) | (273.388) | |
Total equity | 1.201.466 | 1.176.687 | |
LIABILITIES | |||
Non- current liabilities | |||
Borrowings | 17 | 1.852.508 | 1.760.493 |
Retirement benefit obligations | 75.767 | 74.495 | |
Provisions for other liabilities and charges | 3.000 | 3.000 | |
Other long term liabilities | 11.293 | 11.618 | |
1.942.568 | 1.849.606 | ||
Current liabilities | |||
Trade and other payables | 18 | 2.081.285 | 2.614.360 |
Derivative financial instruments | 54.514 | 60.087 | |
Current income tax liabilities | 8 | 1.909 | 16.901 |
Borrowings | 17 | 1.046.907 | 1.010.114 |
Dividends payable | 1.125 | 65.127 | |
3.185.740 | 3.766.589 | ||
Total liabilities | 5.128.308 | 5.616.195 | |
Total equity and liabilities | 6.329.774 | 6.792.882 | |
Parent Company Statement of Comprehensive Income
For the three month period ended | |||
Note | 31 March 2015 | 31 March 2014 | |
Sales | 1.736.682 | 1.928.825 | |
Cost of sales | (1.582.303) | (1.904.180) | |
Gross profit | 154.379 | 24.645 | |
Selling and distribution expenses | (27.753) | (29.391) | |
Administrative expenses | (18.555) | (15.210) | |
Exploration and development expenses | (355) | (485) | |
Other operating income / (expenses) - net | 5 | 295 | 2.158 |
Dividend income | 133 | - | |
Operating profit / (loss) | 108.144 | (18.283) | |
Finance (expenses) / income -net | 6 | (40.102) | (40.793) |
Currency exchange gains / (losses) | 7 | (37.314) | 1.083 |
Profit / (loss) before income tax | 30.728 | (57.993) | |
Income tax expense | 8 | (10.072) | 15.743 |
Profit / (Loss) for the period | 20.656 | (42.250) | |
Other comprehensive income: | |||
Items that may be reclassified subsequently to profit or loss: | |||
Fair value gains/(losses) on cash flow hedges | 4.123 | (2.438) | |
Other Comprehensive income/(loss) for the period, net of tax | 4.123 | (2.438) | |
Total comprehensive income/(loss) for the period | 24.779 | (44.688) | |
Basic and diluted earnings per share(expressed in Euro per share) | 9 | 0,07 | (0,14) |
Parent Company Statement of Cash Flows
For the three month period ended | |||
Note | 31 March 2015 | 31 March 2014 | |
Cash flows from operating activities | |||
Cash used in operations | 19 | (735.699) | (485.160) |
Income tax paid | (15.101) | - | |
Net cash generated from / (used in) operating activities | (750.800) | (485.160) | |
Cash flows from investing activities | |||
Purchase of property, plant and equipment & intangible assets | 10,11 | (14.511) | (23.408) |
Dividends received | 133 | - | |
Interest received | 6 | 6.031 | 4.420 |
Net cash used in investing activities | (8.347) | (18.988) | |
Cash flows from financing activities | |||
Interest paid | (78.703) | (29.471) | |
Dividends paid | (64.002) | (11) | |
Proceeds from borrowings | 237.500 | 82.038 | |
Repayments of borrowings | (153.520) | (40.688) | |
Net cash generated from financing activities | (58.725) | 11.868 | |
Net increase in cash, cash equivalents and restricted cash | (817.872) | (492.280) | |
Cash, cash equivalents and restricted cash at beginning of the period | 14 | 1.593.262 | 739.311 |
Exchange gains / (losses) on cash, cash equivalents and restricted cash | 7.433 | 428 | |
Net increase in cash, cash equivalents and restricted cash | (817.872) | (492.280) | |
Cash, cash equivalents and restricted cash at end of the period | 14 | 782.823 | 247.459 |
Full set of Group and Parent Company Financial Statements can be found on the Group's website: www.helpe.gr