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Regulatory News


3rd Quarter Results

Thu, 8th Nov 2018 15:31


RNS Number : 8254G
Hellenic Petroleum S.A.
08 November 2018

PRESS RELEASE

8 November 2018

Third Quarter / Nine month 2018 financial results

Record high 9M18 reported Net Income (+32%) and exports; stronger profitability, increased production and sales in 3Q18.

HELLENIC PETROLEUM Group announced its 3Q and 9M financial results. 3Q17 Reported EBITDA came in at 258 m (+12%), leading 9M to a record high of 731 m (+20%). IFRS Reported Net Income amounted to 135 m (+28%) in Q3 and 360 m (+32%) in 9M, the highest on record, with Earnings per Share (EPS) at 1.18.

Higher sales volumes and crude prices led 9M18 sales revenues at 7.3 bn (+ 25%).

Likewise, excluding the impact of increasing crude oil prices on inventory and one-off items, 3Q18 Adjusted EBITDA reached 237m, (+15%), while 9M18 came in at 574 m, with Adjusted Net Income at 111m (+25%) in 3Q18 and 239m in 9M18 (-23%).

The main driver for improved 3Q18 operating profitability was strong refining performance which, through increased mechanical availability, normalised operations and optimal crude selection, delivered the highest ever overperformance vs benchmark refining margins of $7.3/bbl. Equally, the significant increase in production vs 3Q17 (4m MT, +19%), led total sales higher by 8% and exports by 27%. Operating performance outweighed the significant decline in benchmark refining margins by 20%, as well as the cost of increased CO2 emissions rights provisions. Regarding feedstock supply, following the re-imposition of US sanctions, the Group substituted Iranian crude with alternative crude oil types, a switch that did not affect performance adversely.

As a result, 9M18 production rose to 11.7 m tons (+ 5%) and sales volumes to 12.4 m tons (+ 3%) with exports at 7.1 m tons, accounting for 57% of total sales.

The Group's financial position strengthened further, with finance cost 13% lower in 9M18 and 11% in 3Q18, following the successful completion of the 2018 refinancing program.

3Q18 operating cashflow (Adj. EBITDA - Capex) amounted to 203 m, the highest since 1Q17, bringing Net Debt at 1.8bn, lower q-o-q and gearing at 40%, the lowest level in the last 2.5 years.

Based on 9M18 reported results, the Board of Directors approved the distribution of 0.25/share as interim dividend for 2018.

High and volatile crude oil prices, strong USD sustained

US sanctions on Iran, combined with increased production in North America, led 3Q18 crude oil prices averaging $76/bbl, flat vs 2Q18, but significantly higher compared to 3Q17 (+46%). Prices were volatile, recording their highest level since 2014, at the end of 3Q18.

Macro and political developments in Eurozone and the US resulted in a further strengthening of USD against the euro q-o-q, averaging $1.16, flat vs 3Q17 ($1.17).

Product cracks, excluding diesel, were weaker compared to 3Q17, leading the Med benchmark refining margins 20% lower, with FCC benchmark at $5.7/bbl vs $7.1/bbl last year, while decline was lower for Hydrocracking margins, which averaged $5.6/bbl (3Q 2017 $5.9/bbl).

Increased aviation fuels demand

Total domestic fuels demand was 1.6 m tones, - 1% vs 3Q17. The marine and aviation market recorded an increase of 3%, with a significant improvement in aviation fuels market (+ 10%), due to tourism.

Important developments

In E&P, the lease agreements for "Block 10 - Kyparissiakos Gulf" (HELPE 100%) and two offshore areas west and southwest of Crete, (HELPE 20%, Total 40% - operator, ExxonMobil 40%) were finalized, pending formal signing and customary approvals.

With regards to DESFA sale, the spin-off of DESFA from DEPA through an in kind share capital reduction of DEPA, in exchange for DESFA shares to owners HRADF and HELPE is in process, while the certification of DESFA from energy regulatory authorities is pending. The transaction is expected to be completed in the next quarter. The proceeds of the sale, net of applicable taxes, will be applied mostly towards repaying existing debt, while an extraordinary dividend may also be considered.

In the context of DEPA Group's reorganization of distribution and marketing activities, the acquisition of remaining 49% of EPA and EDA Attikis from Attiki Gas (subsidiary of Shell Gas BV) is expecting approvals from competition authorities.

Key highlights and contribution for each of the main business units in 3Q18 were:

REFINING, SUPPLY & TRADING

- Refining, Supply & Trading 3Q18 Adjusted EBITDA at 173m (+25%), with 9M18 at 423 m (-17%).

- The improved operation of the refineries in 3Q18 led to an increase in production and sales to 4 m tons (+19%) and 4.1 m tons (+8%) respectively.

- HELPE 3Q18 realised margin amounted to $12.1/bbl, mainly on taking advantage of opportunities in crude pricing structure.

- Crude slate differentiation had an impact on product yields as well, with middle distillates at 52%, while fuel oil was reduced at 10%.

PETROCHEMICALS

- Higher sales volumes of polypropylene (+5%) and increased contribution of the Aspropyrgos refinery propylene unit led to increased profitability, with Adjusted EBITDA at 25 m (+5%).

MARKETING

- 3Q18 Marketing Adjusted EBITDA at 42 m and 9M18 at 81 m.

- Increased aviation fuels volumes maintained 3Q18 profitability at similar levels vs 3Q17, with Domestic Marketing Adjusted EBITDA at 26 m (-3%).

- Weaker margins in most markets where the Group operates, had a negative impact on International Marketing profitability, with 3Q18 Adjusted EBITDA at 16 m (-14%).

ASSOCIATED COMPANIES

- DEPA Group participation to consolidated Net Income came in at 7m.

- Elpedison EBITDA amounted to 4 m (+82%), due to improved Retail contribution.

Key consolidated financial indicators (prepared in accordance with IFRS) for 3Q18 are shown below:

million

3Q17

3Q18

% ?

9M17

9M18

% ?

P&L figures

Refining Sales Volumes ('000 ??)

3,787

4,087

8%

11,991

12,354

3%

Sales

1,823

2,674

47%

5,888

7,341

25%

EBITDA

230

258

12%

608

731

20%

Adjusted EBITDA 1

206

237

15%

663

574

-14%

Net Income

106

135

28%

273

360

32%

Adjusted Net Income 1

89

111

25%

313

239

-23%

Balance Sheet Items

Capital Employed

4,142

4,421

7%

Net Debt

1,811

1,773

-2%

Debt Gearing (ND/ND+E)

44%

40%

Notes:1. Calculated as Reported adjusted for inventory effects and other non-operating items.

Further information:

V. Tsaitas, Investor Relations Officer

Tel.: +30-210-6302399

Email: vtsaitas@helpe.gr

Group Consolidated statement of financial position

As at

Note

30 September 2018

31 December 2017

ASSETS

Non-current assets

Property, plant and equipment

10

3.261.709

3.311.893

Intangible assets

11

106.354

105.684

Investments in associates and joint ventures

704.346

701.635

Deferred income tax assets

67.260

71.355

Investment in equity instruments

2,3

839

1.857

Loans, advances and long term assets

84.380

89.626

4.224.888

4.282.050

Current assets

Inventories

12

1.211.620

1.056.393

Trade and other receivables

2,13

938.400

791.205

Assets held for sale

10

3.600

-

Derivative financial instruments

3

21.925

11.514

Cash, cash equivalents and restricted cash

14

1.053.450

1.018.913

3.228.995

2.878.025

Total assets

7.453.883

7.160.075

EQUITY

Share capital and share premium

15

1.020.081

1.020.081

Reserves

16

268.407

358.056

Retained Earnings

1.294.875

930.522

Capital and reserves attributable to owners of the parent

2.583.363

2.308.659

Non-controlling interests

63.864

62.915

Total equity

2.647.227

2.371.574

LIABILITIES

Non-current liabilities

Borrowings

17

1.424.034

920.234

Deferred income tax liabilities

169.592

131.611

Retirement benefit obligations

149.404

133.256

Provisions for other liabilities and charges

4.344

6.371

Trade and other payables

26.446

28.700

1.773.820

1.220.172

Current liabilities

Trade and other payables

18

1.523.280

1.661.457

Income tax payable

105.539

5.883

Borrowings

17

1.403.323

1.900.269

Dividends payable

694

720

3.032.836

3.568.329

Total liabilities

4.806.656

4.788.501

Total equity and liabilities

7.453.883

7.160.075

Group Consolidated statement of comprehensive income

For the 9 month period ended

For the 3 month period ended

Note

30 September 2018

30 September 2017

30 September 2018

30 September 2017

Sales

4

7.341.129

5.888.487

2.674.220

1.822.785

Cost of sales

(6.420.913)

(2.349.606)

Gross profit

920.216

779.045

324.614

276.154

Selling and distribution expenses

(234.407)

(198.401)

(79.945)

(64.914)

Administrative expenses

(104.294)

(93.852)

(37.899)

(30.807)

Exploration and development expenses

(660)

(249)

(631)

(40)

Other operating income/(expenses) and other gains/(losses)-net

5

7.176

(17.540)

2.529

(2.842)

Operating profit

588.031

469.003

208.668

177.551

Finance income

2.783

3.020

1.034

582

Finance expense

(114.569)

(131.413)

(36.804)

(40.875)

Currency exchange gains/ (losses)

6

2.540

(8.317)

(1.988)

(1.468)

Share of profit of investments in associates and joint ventures

7

28.484

34.956

13.402

4.297

Profit before income tax

507.269

367.249

184.312

140.087

Income tax expense

8

(147.341)

(94.043)

(49.556)

(34.525)

Profit for the period

359.928

273.206

134.756

105.562

Other comprehensive income/ (loss) :

Items that will not be reclassified to profit or loss:

Actuarial losses on defined benefit pension plans

16

(7.579)

(2.219)

(7.579)

-

Changes in the fair value of equity instruments

2, 16

(524)

849

(82)

(1.276)

Reduction in value of land

-

(1.669)

-

-

(8.103)

(3.039)

(7.661)

(1.276)

Items that may be reclassified subsequently to profit or loss:

Derecognition of (losses) / gains on hedges through comprehensive income

16

(14.920)

1.979

-

-

Fair value gains /(losses) on cash flow hedges

16

21.537

(13.014)

5.281

8.416

Currency translation differences and other movements

16

(481)

577

(355)

412

6.136

(10.458)

4.926

8.828

Other comprehensive income/(loss) for the period, net of tax

(1.967)

(13.497)

(2.735)

7.552

Total comprehensive income for the period

357.961

259.709

132.021

113.114

Profit attributable to:

Owners of the parent

356.936

270.905

133.325

103.454

Non-controlling interests

2.992

2.301

1.431

2.108

359.928

273.206

134.756

105.562

Total comprehensive income attributable to:

Owners of the parent

354.967

258.101

130.650

110.885

Non-controlling interests

2.994

1.608

1.371

2.229

357.961

259.709

132.021

113.114

Basic and diluted earnings per share
(expressed in Euro per share)

9

1,17

0,89

0,44

0,34

Group Consolidated statement of cash flows

For the 9 month period ended

Note

30 September 2018

30 September 2017

Cash flows from operating activities

Cash generated from operations

19

296.902

284.711

Income tax received/(paid)

(2.571)

(5.626)

Net cash generated from operating activities

294.331

279.085

Cash flows from investing activities

Purchase of property, plant and equipment & intangible assets

10,11

(94.985)

(137.539)

Proceeds from disposal of property, plant and equipment & intangible assets

227

401

Settlement of consideration of acquisition of further equity interest in subsidiary

24

(16.000)

-

Purchase of subsidiary, net of cash acquired

24

(1.298)

-

Grants received

80

-

Interest received

2.783

3.020

Dividends received

24.023

19.346

Investments in associates - net

-

(147)

Proceeds from disposal of investments in equity instruments

263

-

Net cash used in investing activities

(84.907)

(114.919)

Cash flows from financing activities

Interest paid

(99.981)

(126.677)

Dividends paid to shareholders of the Company

(74.479)

(59.578)

Dividends paid to non-controlling interests

(2.061)

(2.561)

Movement in restricted cash

14

144.445

11.873

Acquisition of treasury shares

16

(560)

(10.245)

Participation of minority shareholders in share capital increase of subsidiary

17

76

Proceeds from borrowings

408.089

285.800

Repayments of borrowings

(409.726)

(473.400)

Net cash generated from/ (used in) financing activities

(34.256)

(374.712)

Net increase/(decrease) in cash and cash equivalents

175.168

(210.546)

Cash and cash equivalents at the beginning of the period

14

873.261

924.055

Exchange gains/(losses) on cash and cash equivalents

3.813

(9.464)

Net increase/(decrease) in cash and cash equivalents

175.168

(210.546)

Cash and cash equivalents at end of the period

14

1.052.242

704.045

Parent Company Statement of Financial Position

As at

Note

30 September 2018

31 December 2017

ASSETS

Non-current assets

Property, plant and equipment

9

2.679.748

2.719.172

Intangible assets

10

6.447

7.042

Investments in subsidiaries, associates and joint ventures

689.372

671.622

Investment in equity instruments

3

460

1.252

Loans, advances and long-term assets

21.635

19.686

3.397.662

3.418.774

Current assets

Inventories

11

1.108.231

963.746

Trade and other receivables

12

1.087.558

989.901

Derivative financial instruments

3

21.925

11.514

Cash, cash equivalents and restricted cash

13

878.900

813.251

3.096.614

2.778.412

Total assets

6.494.276

6.197.186

EQUITY

Share capital

14

1.020.081

1.020.081

Reserves

15

272.785

360.694

Retained Earnings

771.059

428.448

Total equity

2.063.925

1.809.223

LIABILITIES

Non-current liabilities

Borrowings

16

1.454.547

909.579

Deferred income tax liabilities

131.262

89.959

Retirement benefit obligations

117.257

104.331

Derivative financial instruments

-

-

Provisions for other liabilities and charges

2.291

6.058

Trade and other payables

14.897

15.569

1.720.254

1.125.496

Current liabilities

Trade and other payables

17

1.413.156

1.554.027

Current income tax liabilities

100.878

2.769

Borrowings

16

1.195.369

1.704.951

Dividends payable

694

720

2.710.097

3.262.467

Total liabilities

4.430.351

4.387.963

Total equity and liabilities

6.494.276

6.197.186

Parent Company Statement of Comprehensive Income

For the 9 month period ended

For the 3 month period ended

Note

30 September 2018

30 September 2017

30 September 2018

30 September 2017

Sales

4

6.734.332

5.322.795

2.411.682

1.598.741

Cost of sales

(6.068.484)

(4.795.134)

(2.191.231)

(1.425.204)

Gross profit

665.848

527.661

220.451

173.537

Selling and distribution expenses

(71.742)

(44.123)

(23.610)

(12.352)

Administrative expenses

(64.675)

(56.249)

(24.533)

(19.101)

Exploration and development expenses

(834)

(95)

(672)

(29)

Other operating income/(expenses) & other gains/(losses)-net

5

3.963

(24.571)

2.919

(3.502)

Operating profit

532.560

402.623

174.555

138.553

Finance income

7.026

9.278

2.412

2.983

Finance expense

(105.089)

(118.303)

(33.505)

(36.742)

Dividend income

35.083

33.724

-

-

Currency exchange losses

6

2.721

(8.625)

(1.522)

(1.601)

Profit before income tax

472.301

318.697

141.940

103.193

Income tax expense

7

(139.575)

(83.559)

(42.941)

(29.156)

Profit for the period

332.726

235.138

98.999

74.037

Other comprehensive income / (loss):

Items that will not be reclassified to profit or loss:

Acruarial losses on defined benefit pension plans

15

(6.200)

(1.775)

(6.200)

-

Changes in the fair value of equity instruments

15

(565)

804

(97)

(1.325)

(6.765)

(971)

(6.297)

(1.325)

Items that may be reclassified subsequently to profit or loss:

Fair value gains / (losses) on cash flow hedges

15

(8.303)

(13.014)

(24.559)

8.416

Derecognition of gains/(losses) on hedges through comprehensive income

15

14.920

1.979

29.840

-

6.617

(11.035)

5.281

8.416

Other Comprehensive income / (loss) for the period, net of tax

(148)

(12.006)

(1.016)

7.091

Total comprehensive income for the period

332.578

223.132

97.983

81.128

Basic and diluted earnings per share
(expressed in Euro per share)

8

1,09

0,77

0,32

0,24

Parent Company Statement of Cash flows

For the 9 month period ended

Note

30 September 2018

30 September 2017

Cash flows from operating activities

Cash generated from operations

18

258.838

219.205

Income tax received / (paid)

2.224

(20)

Net cash generated from operations

261.062

219.185

Cash flows from investing activities

Purchase of property, plant and equipment & intangible assets

9,10

(63.368)

(110.018)

Dividends received

35.083

33.724

Interest received

7.026

9.278

Settlement of consideration of acquisition of further equity interest in subsidiary

23

(16.000)

-

Participation in share capital increase of subsidiaries & associates

23

(21.054)

(3.917)

Net cash used in investing activities

(58.313)

(70.933)

Cash flows from financing activities

Interest paid

(92.376)

(128.829)

Dividends paid

(74.480)

(59.578)

Loans to affiliated companies

(2.925)

-

Movement in restricted cash

13

144.445

11.873

Acquisition of treasury stock

15

(561)

(10.245)

Proceeds from borrowings

436.284

303.157

Repayments of borrowings

(406.857)

(446.937)

Net cash generated from / (used in) financing activities

3.530

(330.559)

Net decrease in cash and cash equivalents

206.279

(182.307)

Cash and cash equivalents at the beginning of the period

13

667.599

731.258

Exchange losses on cash and cash equivalents

3.815

(8.625)

Net decrease in cash and cash equivalents

206.279

(182.307)

Cash and cash equivalents at end of the period

13

877.693

540.326


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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