Helleniq Gds S Regulatory News (HLPD)

9 May 2007 16:05

Hellenic Petroleum S.A.09 May 2007 PRESS RELEASE May 9, 2007 FIRST QUARTER 2007 FINANCIAL RESULTS (In accordance with International Financial Reporting Standards) Improved operating profitability; "Clean" net income up 15% Q1 2007 Reported Consolidated Net Income was €55m, corresponding to €0.18 pershare (EPS). Adjusting for inventory effects, "Clean" Net Income was up 15%y-o-y to €53m. Reported Group Earnings before Interest, Tax, Depreciation andAmortization (EBITDA) were €102m; on a comparable, "Clean" basis, they were up3% to €100m. Key financials for 1Q07 and comparisons to last year's first quarter, are: • Sales Revenue €1.9bn, up 8% • Net profits €55m, down 25% • Earnings per share €0.18, down 25% • "Clean" EBITDA €100m, up 3% • "Clean" net income €53m, up 15% • ROACE of 8.2% (12-mth trailing) • ROE of 10.2% (12-mth trailing) Key themes for 1Q07 results were: (a) Mixed refining environment a. 1Q07 saw improved refining margins both y-o-y and q-o-q, despite a slowstart in January. Benchmark cracking margins rose 17% y-o-y and 33% over Q4:06levels, mainly driven by strong gasoline market. Positive benchmark marginsimpact on results was, however, offset by the lower average EUR/USD rate. b. Growing Greek products market (excluding seasonal heating Gasoil sales) by3.2%; on the back of strong gasoline, automotive diesel, aviation and bunkerfuel sales. Heating gasoil sales down 19% due to warmer winter. c. Crude oil prices dropped in the beginning of the year, recoveringthereafter to support a small inventory benefit for 1Q and provide a strong basefor the next quarter. (b) Improved overall operating profitability d. Quarterly Group "Clean" EBITDA reached €100m, 3% up, while "Clean" NetIncome increased by 15% to €53m with increased contribution (c€9m) from35%-owned DEPA. e. Petrochemicals and Power delivered significantly improved performances,the EBITDA of which doubled compared to 1Q06 f. Continuation of cost containment measures, with operating expenses inRefining, Supply & Trading lower on a y-o-y basis and BEST-50 procurementinitiative identifying opportunities of €4-5m further savings. g. Core Refining, Supply & Trading results are as expected distorted by theplanned, 3-week turnaround of the Aspropyrgos refinery. Lower heating gasoilsales and the risk management impact offset by trading gains on 2006 Contangotransactions. h. Weak Marketing performance in Greece due to lower heating gasoil sales andretail margin pressure. Key business developments for 1Q07: REFINING, SUPPLY & TRADING Refining, Supply & Trading, accounts for over 70% of total pre-tax profits.Comparable "Clean" EBITDA reached €72m (vs €78m in 1Q06). Key drivers for 1Q07 were: i. Increased sales volume by Greek refineries on most products exceptheating gasoil. Automotive diesel and gasoline sales were up 13% and 10%respectively, with market share gains for both products. j. OKTA sales volume grew 24% with both domestic and export businessgrowth. k. As expected Refining results were affected by the planned 3-week,turnaround of the Aspropyrgos refinery, lower heating gasoil sales and riskmanagement transactions. l. Reported profitability adversely impacted from lower inventory gainsvis-a-vis 1Q06. m. Lower operating expenditure, as costs remain in check. As already announced, the BoD has approved the investment in the upgrade ofElefsina and Thessaloniki refineries. These projects are important as they willeffectively rebase the Group's refining operations in Greece with a significantaddition to sustainable bottom line and cashflow generation Implementation workis in progress taking into account the size and complexity of the project. RETAIL MARKETING EKO sales volume in Greece was down by -3% to 1m tonnes, as weather driven lowerheating gasoil volumes more than offset improved automotive diesel and gasolinesales In addition, intensified market competition impacts on realised retailmargins which coupled with the volume impact above leads to EBITDA of €5m (down47%). Network rationalisation remains a key theme of the strategy with one moreCalypso petrol station and 12 company owned sites added in 1Q07 bringing thetotal number of controlled petrol stations to 243 (19% of total network) International Marketing benefits from network expansion (y-o-y network sales up17%) and margin improvements and market shares in most markets. Total petrolstations abroad increased to 225, up 29% on a y-o-y basis. PETROCHEMICALS Strong performance by polypropylene, tight grip on operating expenses and thelack of any significant provisions led to a sharp improvement in theprofitability of Petrochemicals; sales volume increased 19% to 119kt, and EBITDAgrew 193% to €14m. POWER GENERATION AND TRADING At the back of a strong exit rate from 2006, the power generation results are upcompared to last year with sales of €38m (+36%) and EBITDA doubling to €10m. Therefinancing of the construction loan was completed in 1Q07, with material P&Land cashflow benefits for the company. EXPLORATION & PRODUCTION In line with our stated strategy, our drilling campaign in Libya is in progress,with initial discoveries under assessment by the Woodside-led joint venture, inwhich we participate with a 20% stake. In addition, exploration activities inEgypt's West Obayed region are focusing on data acquisition and interpretation.Finally, we continue to closely monitor international markets for a possibleacquisition of a producing asset. INVESTMENT PLAN Group capital expenditure during 1Q07 amounted to €33m (compared to €17m a yearearlier) and relate mostly to the planned, 3-week turnaround of the Aspropyrgosrefinery and the further expansion of our petrol stations networks in Greece andabroad. As already announced, the Board of Directors has taken the Final InvestmentDecision to proceed with the upgrades of the Elefsina and Thessalonikirefineries, which are budgeted at approximately €1bn in total and are expectedto be completed by 2010. We are currently progressing with long lead time itemsorders and the contracting strategy. FINANCIAL POSITION Group capital employed amounted to €3.4bn at end-March 2007, up 5% over 1Q06,due to high crude oil and product prices. Group debt at €995m is down fromyear-end levels of €1.044m as Contango trades generate cash inflows. The gearingratio (D/D&E) remains within projected target levels at 30%. Key Financial Indicators for the Group are shown below: HELLENIC PETROLEUM GROUP CONSOLIDATED KEY FINANCIAL RESULTS FOR THE THREE PERIOD ENDED 31 MARCH 2007 (Prepared in accordance with IFRS) • million 1Q06 1Q07 % DeltaReportedNet Sales 2,058 1,885 -8%EBITDA 134 102 -24%Earnings Before Tax 107 70 -35%Net Income 72 55 -25%Earnings Per Share (•) 0.24 0.18 -25%"Clean" (adjusted for inventory effects)EBITDA 97 100 3%Earnings Before Tax 70 68 -3%Net Income 46 53 15%Earnings Per Share (•) 0.15 0.17 15%Balance Sheet ItemsCapital Employed 3,261 3,425 5%Net Debt 930 995 7%Debt Gearing (D/D+E) (%) 29% 30% - Complete IFRS financial statements are available at the website: www.hellenic-petroleum.gr Group Consolidated Balance Sheet as at 31 March 2007 As at 31 March 2007 31 December 2006ASSETSNon-current assetsProperty, plant and equipment 1,373,413 1,380,334Intangible assets 123,245 117,270Investments in affiliated companies 375,930 366,165Deferred income tax assets 9,734 10,293Available-for-sale financial assets 3,717 3,813Loans, advances and other receivables 62,105 58,674 1,948,144 1,936,549Current assetsInventories 1,124,243 1,206,683Trade and other receivables 1,042,619 1,049,763Cash and cash equivalents 154,791 170,490 2,321,653 2,426,936Total assets 4,269,797 4,363,485 EQUITYShare capital 1,020,081 1,020,081Reserves 548,648 571,312Retained Earnings 747,182 693,517Capital and reserves attributable to Company Shareholders 2,315,911 2,284,910 Minority interest 114,081 112,700 Total equity 2,429,992 2,397,610 LIABILITIESNon- current liabilitiesBorrowings 802,042 322,695Deferred income tax liabilities 21,907 21,492Retirement benefit obligations 143,455 140,956Provisions and other long term liabilities 96,998 77,043 1,064,402 562,186Current liabilitiesTrade and other payables 399,907 494,963Current income tax liabilities 21,543 10,304Borrowings 351,341 895,661Dividends payable 2,612 2,761 775,403 1,403,689Total liabilities 1,839,805 1,965,875Total equity and liabilities 4,269,797 4,363,485 Group Consolidated Income Statement for the year ended 31 March 2007 For the three month period ended 31 March 2007 31 March 2006 Sales 1,884,730 2,061,409 Cost of sales (1,730,805) (1,875,121) Gross profit 153,925 186,288 Selling, distribution and administrative expenses (87,271) (89,080) Exploration and development expenses (2,327) (1,194) Other operating (expenses) / income - net 9,692 (498) Operating profit 74,019 95,516 Finance costs -net (10,149) (6,237) Currency exchange gains /(losses) (3,544) 12,296 Share of operating profit of associates 9,765 5,684 Profit before income tax 70,091 107,259 Income tax expense (14,396) (32,472) Profit for the period 55,695 74,787 (Less) / Add Minority Interest (1,187) (2,584) Net Income attributable to Equity holders of the Company 54,508 72,203 Basic and diluted earnings per share (expressed in Euro per share) 0.18 0.24 Parent Company Balance Sheet as at 31 March 2007 As at 31 March 2007 31 December 2006ASSETSNon-current assetsProperty, plant and equipment 647,489 646,130Intangible assets 25,135 22,288Investments in affiliated companies 692,110 692,054Available-for-sale financial assets 67 67Loans, advances and other receivables 175 3,772 1,364,976 1,364,311 Current assetsInventories 1,014,890 1,107,490Trade and other receivables 822,426 828,103Cash and cash equivalents 32,344 37,878 1,869,660 1,973,471Total assets 3,234,636 3,337,782 EQUITYShare capital 1,020,081 1,020,081Reserves 536,723 559,387Retained Earnings 484,637 450,439Total equity 2,041,441 2,029,907 LIABILITIESNon- current liabilitiesBorrowings 287,920 295,335Deferred income tax liabilities 405 405Retirement benefit obligations 116,676 115,114Provisions and other long term liabilities 67,006 47,939 472,007 458,793 Trade and other payables 332,929 419,810Current income tax liabilities 12,016 -Borrowings 373,630 426,511Dividends payable 2,613 2,761 721,188 849,082Total liabilities 1,193,195 1,307,875Total equity and liabilities 3,234,636 3,337,782 Parent Company Income Statement for the year ended 31 March 2007 For the three month period ended 31 March 2007 31 March 2006 Sales 1,758,168 1,963,436 Cost of sales (1,658,925) (1,835,264) Gross profit 99,243 128,172 Selling, distribution and administrative expenses (43,732) (45,662) Exploration and development expenses (2,327) (1,193) Other operating (expenses) / income - net 1,644 (3,087) Operating profit 54,828 78,230 Finance costs -net (5,876) (2,467) Currency exchange gains /(losses) (2,738) 11,104 Profit before income tax 46,214 86,867 Income tax expense (12,016) (26,274) Profit for the period 34,198 60,593 Basic and diluted earnings per share (expressed in Euro per share) 0.11 0.20 This information is provided by RNS The company news service from the London Stock Exchange