13th Mar 2006 12:26
Hellenic Petroleum S.A.13 March 2006 February 21, 2006 FULL - YEAR 2005 FINANCIAL RESULTS (In accordance with International Financial Reporting Standards) Strong profits and higher dividend for Hellenic Petroleum Group in 2005 Hellenic Petroleum Group reported 2005 Consolidated Earnings Before Tax of €495million and Net Income of €334 million, corresponding to €1.09 per share (EPS),up 161% compared to 2004. Hellenic Petroleum's Board of Directors willrecommend to the forthcoming AGM the payment of a final dividend of • 0.28 pershare. Including the interim dividend of €0.15 per share which was approved bythe December 2005 EGM, this brings the total dividend for 2005 to €0.43 pershare, 65% higher than 2004. The total dividend of €0.43 per share consists ofan ordinary dividend of €0.25 per share and an extraordinary dividend of €0.18per share. Group Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) for2005 were €671 million. The key 2005 financial indicators were as follows: • Sales €6,653 million, up 36% • EBITDA €671 million, up 80 % • Net Income €334 million, up 161 % • Earnings per share (EPS) €1.09, up 161 % • Operating cash flow measure €486 million, up 545% • ROACE 13.8% versus 5.5% in 2004 • Proposed total dividend for the year (including interim dividend) €0.43 per share, up 65% Significant market factors affecting the 2005 results were: • Continuation of the generally positive refining environment with : - High and volatile crude oil and product prices - High and volatile refining margins for complex refineries in the Mediterranean (Med Cracking refining margins). • Lower domestic demand for petroleum products, with the exception of motor gasoline and jet. • Euro to US Dollar exchange rate at the same average levels of 2004 Key developments by business segment were as follows: REFINING, SUPPLY & TRADING Operating profit for this activity reached €502 million (+134%). Key drivershave been: • Volumes : - Hellenic Petroleum increased its market shares in the Greek market.Total volumes sold from the company's Greek refineries were 15.5 million tons,2% lower than 2004 - OKTA refining sales were 958 thousand tons, 21% higher than in 2004 - Crude transported through the Thessaloniki - Skopje pipeline were 960thousand tons, compared to 830 thousand tons in 2004 • Operational : - Improved yields form Aspropyrgos refinery following the 2004 upgrade - Fully captured supply / refining synergies - Maintained operating expenses at levels lower than 2004 • Market / Environment : - Higher than 2004 cracking refining margins and increasing crude oiland product prices throughout the year had a positive impact on results.Consequently, the Refining, Supply & Trading EBITDA in 2005 increased by €304million compared to 2004, with inventory gains accounting for 50% of thisincrease. RETAIL MARKETING Operating profit for Retail Marketing was €46 million, up 18% from 2004. Theincrease is due to international marketing subsidiaries which, although still inearly growth phase, are delivering improved results and higher sales volumes.The international marketing subsidiaries delivered in 2005 an EBITDA of €22million (+54%) and sales volumes of 749 thousand tons (+4%). EKO, on the otherhand, reported results lower than 2004 due to lower sales volumes (4.0 milliontons in 2005, lower by 2% compared to 2004) and lower gross margins. PETROCHEMICALS Sales volumes of the petrochemical sector in Q4 2005 increased by 8% compared tothe same period of the previous year, while total sales for 2005 were 383thousand tons, 3% lower than 2004. EBITDA for 2005 was €27 million, 19% percentlower that 2004, mainly due to lower global PVC margins. POWER GENERATION AND TRADING Completed the construction of the 390 MW CCGT plant in Thessaloniki, and startedcommercial operation on December 24, 2005, following successful start up andtesting. Started power trading activities through imports at the Northinterconnection and exports to Italy. EXPLORATION AND PRODUCTION The Woodside (45%, operator), Repsol (35%) and Hellenic Petroleum (20%) JVcontinued exploration activities in 6 blocks in Sirte and Murzuk basins inLibya, and evaluation of Atchan gas field in line with plans and commitments toNOC. 2006 drilling program is underway. Hellenic Petroleum submitted a bid in the EGPC exploration round for two blocksin Egypt. Hellenic Petroleum's management key targets remain the safe operations of theassets, the improvement of the competitive position of the Group, and theincrease of returns on capital employed. To this extend key accomplishmentsduring 2005 included: • Safer operation of installations and reduction of the Lost WorkdayInjury Frequency (LWIF) index in 2005 to 3.48, compared to 4.75 in 2004 • Strict control of operating expenses, which were maintained atlevels lower than 2004 • Recruitment of new experienced management team for theinternational activities, with specific knowledge of the markets abroad • Introduction of a variable compensation scheme for the managementteam of Hellenic Petroleum, linked to Key Performance Indicators and PersonalBusiness Objectives Capital investments for 2005 were €185 million, 50% of which were the completionof the 390 MW power plant in Thessaloniki. The total net debt of the Group at the end of the year amounted to • 700million, lower by €13 million compared to September 30, 2005. Although highcrude oil and product prices led to increased working capital requirements, debtgearing at the end of 2005 was still low at 25 % (D/D+E) compared to 17% at theend of 2004. Following the positive results of the year and the strong financial position ofthe Group, the Board of Directors will propose to the General Assembly thepayment of final dividend of €0.28 per share which, including the interimdividend of €0.15 per share that was approved by the December 2005 EGM, bringsthe total dividend for 2005 to €0.43 per share, 65% higher than 2004. Key Financial Indicators for the Group are attached below: HELLENIC PETROLEUM GROUP FULL - YEAR 2005 CONSOLIDATED KEY FINANCIAL RESULTS (Prepared in accordance with IFRS) FULL YEAR • MILLION 2004 2005 % Net Sales 4,907 6,653 36 % EBITDA 372 671 80 % Earnings before Tax 240 495 106 % Net Income 128 334 161 % Earnings per Share (EPS) • 0.42 1.09 161 % Operating Cash Flow (1) 75 486 545 % Net Debt 386 700 -- Debt Gearing (D/D+E) 17% 25 % -- (1) Calculated as EBITDA less capital expenditure. Complete IFRS financial statements are available at the website: www.hellenic-petroleum.gr Consolidated Balance Sheet As at (Euro in thousands) 31 December 2005 31 December 2004ASSETSNon-current assetsProperty, plant and equipment 1.405.940 1.355.703Intangible assets 94.859 83.353Investments in associates 357.858 287.484Deferred income tax assets 42.255 11.003Available-for-sale financial assets 2.092 1.369Loans, advances and long term assets 36.078 30.874 1.939.082 1.769.786 Current assetsInventories 1.169.098 675.851Trade and other receivables 888.079 654.891Cash and cash equivalents 193.630 181.178 2.250.807 1.511.920 Total assets 4.189.889 3.281.706 EQUITYShare capital 1.019.963 1.019.157Reserves 543.642 329.023Retained Earnings 590.933 505.919Capital and reserves attributable to Company Shareholders 2.154.538 1.854.099 Minority interest 101.924 95.395 Total equity 2.256.462 1.949.494 LIABILITIESNon- current liabilitiesBorrowings 539.573 321.404Deferred income tax liabilities 18.645 21.294Retirement benefit obligations 133.747 127.873Provisions and other long term liabilities 67.348 59.683 759.313 530.254Current liabilitiesTrade and other payables 637.043 497.760Current income tax liabilities 153.045 56.720Borrowings 356.360 247.478Dividends payable 27.666 - 1.174.114 801.958 Total liabilities 1.933.427 1.332.212Total equity and liabilities 4.189.889 3.281.706 Consolidated Income Statement For the year ended(Euro in thousands) 31 December 2005 31 December 2004 Sales 6.653.078 4.907.278 Cost of sales (5.797.277) (4.330.634) Gross profit 855.801 576.644 Selling, distribution and administrative expenses (355.823) (352.837) Exploration and development expenses (11.579) (13.115) Other operating income/ (expenses) net 37.982 28.063 Impairment Provisions - (28.000) Operating profit 526.381 210.755 Finance income/ (expense) - net (11.047) (3.505) Currency exchange gains /(losses) (24.823) 34.099 Share of profit/ (loss) of associates 4.317 (1.695) Profit before income tax 494.828 239.654 Income tax expense (153.944) (108.882) Profit for the year 340.884 130.772 Attributable to:Equity holders of the company 334.222 128.218Minority interest 6.662 2.554Profit for the year 340.884 130.772 Earnings per share attributable to CompanyShareholders (expressed in Euro per share):Basic & Diluted 1,09 0,42 Parent Company Balance Sheet As at(Euro in thousands) 31 December 2005 31 December 2004ASSETSNon-current assetsProperty, plant and equipment 657.028 700.796Intangible assets 26.602 15.006Investments in affiliated companies 685.145 693.257Deferred income tax assets 27.606 -Available-for-sale financial assets 5 5 1.396.386 1.409.064 Current assetsInventories 1.071.322 614.530Trade and other receivables 726.822 518.447Cash and cash equivalents 75.956 89.083 1.874.100 1.222.060 Total assets 3.270.486 2.631.124 EQUITYShare capital 1.019.964 1.019.158Reserves 543.643 510.360Retained Earnings 384.708 200.806 Total equity 1.948.315 1.730.324 LIABILITIESNon- current liabilitiesBorrowings 335.187 157.547Deferred income tax liabilities - 7.194Retirement benefit obligations 108.711 100.694Provisions and other liabilities 46.435 37.501 490.333 302.936 Current liabilitiesTrade and other payables 552.055 415.407Current income tax liabilities 135.247 40.750Borrowings 116.870 141.707Dividends payable 27.666 - 831.838 597.864 Total liabilities 1.322.171 900.800Total equity and liabilities 3.270.486 2.631.124 Parent Company Income Statement For the year ended(Euro in thousands) 31 December 2005 31 December 2004 Sales 6.293.075 4.529.772 Cost of sales (5.662.711) (4.171.665) Gross profit 630.364 358.107 Selling, distribution and administrative expenses (167.392) (173.635) Exploration and development expenses (11.579) (13.115) Other operating income/ (expenses) net 12.478 16.570 Impairment of investments (2.000) (18.000) Operating profit 461.871 169.927 Finance costs -net (6.197) (1.007) Currency exchange gains /(losses) (16.118) 32.852 Dividend income 15.404 13.837 Profit before income tax 454.960 215.609 Income tax expense (132.387) (79.819) Profit for the year 322.573 135.790 Earnings per share attributable to the Company 1,06 0,44Shareholders (expressed in Euro per share): This information is provided by RNS The company news service from the London Stock Exchange