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Regulatory News


1st Quarter Results

Thu, 16th May 2019 15:48


RNS Number : 3169Z
Hellenic Petroleum S.A.
16 May 2019

PRESS RELEASE

16 May 2018

First quarter 2019 financial results

Satisfactory performance sustained, despite weaker benchmark refining margins; Higher volumes in the Greek market

HELLENIC PETROLEUM Group 1Q19 Adjusted EBITDA came in at 123m, with Adjusted Net Income at 37m, recording one more quarter of good results and in line with expected industry performance. The drop in benchmark refining margins, mainly on account of the lowest gasoline and naphtha cracks during the last four years and reduced crude availability in the region, as well as maintenance driven production, decrease at 3.6m MT (-9%), led to a negative impact on quarterly operational profitability vs 1Q18.

A mitigating factor to the weak refining environment and crude supply issues has been the flexibility of Group's refineries in processing varied crude grades allowing a sustained over-performance as well as a stronger USD exchange rate. On a comparable basis, non-refining business units' performance at similar levels as 1Q18, contributing by 37% to Group Adj. EBITDA.

With respect to financing costs, a further drop of 16% reflects debt reduction as well as better pricing on account of renegotiation of existing debt facilities. Equity consolidated Power & Gas contribution to Net Income is up (+30%), despite DESFA sale and deconsolidation.

Based on the results above and the positive impact of increasing crude oil prices during the quarter, 1Q19 Reported Net Income amounted to 47m, with results including for the first time the impact of new IFRS 16 on operating leases of retail fuel stations and other equipment.

Benchmark refining margins significantly weaker in 1Q19

During 1Q19, crude oil prices moved higher from the 2018 year-end lows of $50/bbl, reaching $70/bbl at the end of the quarter, mainly due to geopolitical developments and OPEC's decision to reduce crude supply. The lower availability of sour crude grades in the Med led to their prices exceeding those of Brent for the first time since 2013, with negative impact on benchmark margin calculation. This, combined with particularly weak light ends cracks, resulted to complex Med benchmark margins at their lower levels for at least 4 years. Med FCC benchmark margins were 29% lower, averaging $3.4/bbl, with Hydrocracking at $3.7/bbl (-31%).

EUR/USD was flat vs 4Q18, at 1.14, with the USD stronger vs 1Q18.

Increased heating gasoil and bunkering fuels demand

Domestic market fuels demand came in at 1.8m MT (+5%), as heating gasoil consumption was higher (+21%), due to weather conditions, while auto-fuels demand dropped marginally. Aviation and especially bunkering fuels demand recorded another increase (+15%), at 831k MT, mainly on account of increased international marine offtake.

Further balance sheet improvement and financing expenses drop

A reduction of financing expenses was reported for one more quarter and is expected to continue in coming quarters, following the recent renegotiation of existing bank facilities, as well as the repayment of the 325m Eurobond, which matures on 4 July 2019, out of cash reserves.

Overall, Group balance sheet remains strong, with Net debt at 1.5bln, flat q-o-q and debt gearing at 38%, significantly improved vs 1Q18.

The implementation of the new IFRS 16 affected the accounting of operating leases, with a positive EBITDA impact of 9m in 1Q19, mainly in Domestic Marketing, while financial liabilities (mostly retail stations leases) increased by c.175m.

Key strategic developments

In E&P, on 9 April 2019 the Lease Agreements for Block 10 (HELPE 100%) and Block Ionian (Repsol 50% - operator, HELPE 50%) were signed, while during 1Q19 the scheduled environmental and exploration studies in other W. Greece concessions continued.

Key highlights and contribution for each of the main business units in 1Q19 were:

REFINING, SUPPLY & TRADING

- Refining, Supply & Trading 1Q19 Adjusted EBITDA at 80m (-29%), on account of weaker benchmark margins.

- White products' yield remained at 85%, despite the negative impact of maintenance shut-downs.

- Exports were affected by lower refinery utilisation, leading to total 1Q19 sales of 3.6m MT (-13%).

PETROCHEMICALS

- Higher sales volumes partly offset weaker PP margins, with 1Q19 Adjusted EBITDA at 25m (-4%).

MARKETING

- 1Q19 Marketing Adjusted EBITDA at 20m (+46%), following IFRS 16 implementation, while comparable performance was at a similar level to last year.

- In Domestic Marketing, sales volumes were up 5%, on increased heating gasoil demand, with 1Q19 EBITDA at 9m.

- International Marketing volumes increased by 8%, with EBITDA at 11m (+4%), while construction works for the new fuels terminal in Cyprus commenced.

ASSOCIATED COMPANIES

- 1Q19 DEPA Group contribution to consolidated Net Income amounted to 17m. This is up from last year as a result of a combinations of factors, including the different Group structure, with DESFA no longer included, while ownership and consolidation method for regional gas retail and distribution companies has changed.

- The application of flexibility compensation mechanism independent power generators, as well as increased production, led Elpedison's EBITDA at 11m in 1Q18, notably higher vs 1Q18.

HELLENIC PETROLEUM Group of Companies

Key consolidated financial indicators (prepared in accordance with IFRS) for 1Q19 are shown below:

million

1Q18

1Q19

% ?

P&L figures

Refining Sales Volumes ('000 ??)

4,102

3,551

-13%

Sales

2,168

1,991

-8%

EBITDA

166

135

-18%

Adjusted EBITDA 1

149

123

-18%

Net Income

74

47

-37%

Adjusted Net Income 1

62

37

-40%

Balance Sheet Items

Capital Employed

4,419

3,971

-10%

Net Debt

1,973

1,522

-23%

Debt Gearing (ND/ND+E)

45%

38%

-

Notes:

1. Calculated as Reported adjusted for inventory effects and other non-operating items. 1Q19 results includes IFRS16 impact.

Further information:

V. Tsaitas, Investor Relations Officer

Tel.: +30-210-6302399

Email: vtsaitas@helpe.gr

Group Consolidated statement of financial position

As at

Note

31 March 2019

31 December 2018

ASSETS

Non-current assets

Property, plant and equipment

10

3.245.594

3.268.928

Right of use assets

2,11

215.259

-

Intangible assets

12

105.365

105.617

Investments in associates and joint ventures

407.982

390.091

Deferred income tax assets

62.629

64.109

Investment in equity instruments

3

842

634

Loans, advances and long term assets

2

42.163

73.922

4.079.834

3.903.301

Current assets

Inventories

13

1.127.235

993.031

Trade and other receivables

2,14

807.613

821.598

Assets held for sale

3.493

3.133

Derivative financial instruments

3

-

-

Cash, cash equivalents and restricted cash

15

1.223.449

1.276.366

3.161.790

3.094.128

Total assets

7.241.624

6.997.429

EQUITY

Share capital and share premium

16

1.020.081

1.020.081

Reserves

17

266.455

258.527

Retained Earnings

1.099.279

1.052.164

Equity attributable to equity holders of the parent

2.385.815

2.330.772

Non-controlling interests

63.445

63.959

Total equity

2.449.260

2.394.731

LIABILITIES

Non-current liabilities

Interest bearing loans & borrowings

18

1.629.332

1.627.171

Lease liabilities

2

149.496

-

Deferred income tax liabilities

192.098

185.744

Retirement benefit obligations

165.708

163.514

Provisions

42.293

42.038

Trade and other payables

28.873

28.852

2.207.800

2.047.319

Current liabilities

Trade and other payables

19

1.346.411

1.349.153

Derivative financial instruments

5.626

16.387

Income tax payable

90.387

80.171

Interest bearing loans & borrowings

18

1.116.532

1.108.785

Lease liabilities

2

24.732

-

Dividends payable

876

883

2.584.564

2.555.379

Total liabilities

4.792.364

4.602.698

Total equity and liabilities

7.241.624

6.997.429

Group Consolidated statement of comprehensive income

For the three month period ended

Note

31 March 2019

31 March 2018

Revenue from contracts with customers

4

1.991.216

2.168.386

Cost of sales

(1.804.901)

(1.944.687)

Gross profit

186.315

223.699

Selling and distribution expenses

(75.548)

(74.475)

Administrative expenses

(33.963)

(32.129)

Exploration and development expenses

(450)

(126)

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

5

2.916

2.023

Operating profit

79.270

118.992

Finance income

1.000

975

Finance expense

(33.296)

(39.508)

Lease finance cost

(2.273)

-

Currency exchange gain/(loss)

6

1.255

(2.118)

Share of profit of investments in associates and joint ventures

7

18.091

13.895

Profit before income tax

64.047

92.236

Income tax expense

8

(17.433)

(18.015)

Profit for the period

46.614

74.221

Profit attributable to:

Owners of the parent

47.115

74.272

Non-controlling interests

(501)

(51)

46.614

74.221

Other comprehensive income:

Other comprehensive income that will not be reclassified to profit or loss (net of tax):

Changes in the fair value of equity instruments

17

(4)

(147)

Other comprehensive income that may be reclassified subsequently to profit or loss (net of tax):

Fair value gains on cash flow hedges

17

7.889

1.884

Currency translation differences and other movements

17

30

(124)

Other comprehensive income for the period, net of tax

7.915

1.613

Total comprehensive income for the period

54.529

75.834

Total comprehensive income/(loss) attributable to:

Owners of the parent

55.043

75.889

Non-controlling interests

(514)

(55)

54.529

75.834

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

9

0,15

0,24

Group Consolidated statement of cash flows

For the three month period ended

Note

31 March 2019

31 March 2018

Cash flows from operating activities

Cash generated (used in)/ from operations

20

4.514

(98.029)

Income tax received/(paid)

(2.660)

4.492

Net cash generated from / (used in) operating activities

1.854

(93.537)

Cash flows from investing activities

Purchase of property, plant and equipment & intangible assets

10,1

(31.360)

(25.452)

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

245

20

Participation in share capital (increase)/ decrease of associates

200

-

Purchase of subsidiary, net of cash acquired

-

(16.000)

Settlement of consideration of acquisition of further equity interest in subsidiary

-

(1.298)

Grants received

-

80

Interest received

1.000

975

Prepayments for right-of-use assets

(259)

-

Proceeds from disposal of investments in equity instruments

-

257

Net cash used in investing activities

(30.174)

(41.418)

Cash flows from financing activities

Interest paid

(26.215)

(32.663)

Dividends paid to shareholders of the Company

-

(3)

Movement in restricted cash

15

-

144.445

Acquisition of treasury shares

17

-

(249)

Proceeds from borrowings

7.722

-

Repayments of borrowings

148

(165.734)

Payment of lease liabilities

(10.854)

-

Net cash used in financing activities

(29.199)

(54.204)

Net decrease in cash and cash equivalents

(57.519)

(189.159)

Cash and cash equivalents at the beginning of the period

15

1.275.159

873.261

Exchange gain/(loss) on cash and cash equivalents

4.602

(2.514)

Net decrease in cash and cash equivalents

(57.519)

(189.159)

Cash and cash equivalents at end of the period

15

1.222.242

681.588

Parent Company Statement of Financial Position

As at

Note

31 March 2019

31 December 2018

ASSETS

Non-current assets

Property, plant and equipment

9

2.673.521

2.684.237

Right of use assets

2,10

24.311

-

Intangible assets

11

5.427

4.799

Investments in subsidiaries, associates and joint ventures

1.032.372

1.032.372

Investment in equity instruments

3

513

318

Loans, advances and long-term assets

8.625

8.887

3.744.769

3.730.613

Current assets

Inventories

12

1.023.867

893.859

Trade and other receivables

13

659.114

680.347

Cash, cash equivalents and restricted cash

14

1.039.379

1.071.585

2.722.360

2.645.791

Total assets

6.467.129

6.376.404

EQUITY

Share capital and share premium

15

1.020.081

1.020.081

Reserves

16

270.135

262.263

Retained Earnings

900.388

864.333

Total equity

2.190.604

2.146.677

LIABILITIES

Non-current liabilities

Interest bearing loans and borrowings

17

1.661.904

1.657.598

Lease liabilities

2

18.014

-

Deferred income tax liabilities

158.701

151.873

Retirement benefit obligations

134.422

132.539

Provisions

37.725

37.858

Trade and other payables

14.654

14.810

2.025.420

1.994.678

Current liabilities

Trade and other payables

18

1.232.400

1.226.107

Derivative financial instruments

3

5.626

16.387

Income tax payable

86.148

76.322

Interest bearing loans and borrowings

17

919.791

915.350

Lease liabilities

2

6.263

-

Dividends payable

877

883

2.251.105

2.235.049

Total liabilities

4.276.525

4.229.727

Total equity and liabilities

6.467.129

6.376.404

Parent Company Statement of Comprehensive Income

For the three-month period ended

Note

31 March 2019

31 March 2018

Revenue from contracts with customers

4

1.824.373

2.010.635

Cost of sales

(1.703.824)

(1.855.792)

Gross profit

120.549

154.843

Selling and distribution expenses

(24.294)

(22.238)

Administrative expenses

(21.043)

(19.557)

Exploration and development expenses

(29)

(21)

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

5

2.851

619

Operating profit

78.034

113.646

Finance income

2.388

2.487

Finance expense

(30.567)

(36.419)

Lease finance cost

(219)

-

Currency exchange gains/(losses)

6

1.563

(2.501)

Profit before income tax

51.199

77.213

Income tax expense

7

(15.144)

(17.398)

Profit for the period

36.055

59.815

Other comprehensive income/(loss):

Other comprehensive income/(loss), that will not be reclassified to profit or loss (net of tax):

Changes in the fair value of equity instruments

16

(17)

(123)

(17)

(123)

Other comprehensive income/(loss), that may be reclassified subsequently to profit or loss (net of tax):

Fair value gains / (losses) on cash flow hedges

16

7.889

1.884

7.889

1.884

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

7.872

1.761

Total comprehensive income for the period

43.927

61.576

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

8

0,12

0,20

Parent Company Statement of Cash flows

For the three-month period ended

Note

31 March 2019

31 March 2018

Cash flows from operating activities

Cash generated from/(used in) operations

19

9.177

(81.202)

Income tax (paid)/received

(1.768)

5.768

Net cash generated from/(used in) operations

7.409

(75.434)

Cash flows from investing activities

Purchase of property, plant and equipment & intangible assets

9,11

(25.851)

(17.401)

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

4

-

Interest received

2.388

2.487

Settlement of consideration of acquisition of further equity interest in subsidiary

-

(16.000)

Participation in share capital increase of subsidiaries & associates

-

(850)

Net cash used in investing activities

(23.459)

(31.764)

Cash flows from financing activities

Interest paid

(23.295)

(29.957)

Dividends paid

(7)

(3)

Movement in restricted cash

-

144.445

Acquisition of treasury stock

-

(249)

Proceeds from borrowings

4.442

7.700

Repayments of borrowings

-

(161.567)

Payment of lease liabilities

(1.854)

-

Net cash generated from / (used in) financing activities

(20.714)

(39.631)

Net decrease in cash and cash equivalents

(36.764)

(146.829)

Cash and cash equivalents at the beginning of the period

14

1.070.377

667.599

Exchange losses on cash and cash equivalents

4.559

(2.501)

Net decrease in cash and cash equivalents

(36.764)

(146.829)

Cash and cash equivalents at end of the period

14

1.038.172

518.269


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