Last checked at 11 May 2016 15:55
PRESS RELEASE
11 May 2016
First quarter 2016 financial results |
Strong results on the back of positive benchmark refining margins, stable and improved refineries operations, as well as utilisation of liquidity and supply optimisation
In 1Q16, HELLENIC PETROLEUM Group reported another set of strong results, with Adjusted EBITDA at €169m (1Q15: €205m), mainly on the back of sustained high benchmark refining margins, improved operational performance of Group's refineries coupled with the high exports (55% of total sales), as well as the use of the liquidity to take advantage of commercial opportunities in crude supply alternatives during the period.
IFRS Reported Net Income amounted to €32m (1Q15: €17m), negatively impacted (€40m) by the continued crude oil price drop at the beginning of the year, and by one-off provisions in DEPA results. Excluding inventory effect and one-offs, 1Q16 Adjusted Net Income reached €70m (1Q15: €54m).
Group's balance sheet strengthened as higher profitability during the last six quarters, combined with lower capital expenditure, improved operating cash flow generation and provided increased trading optionality and better crude oil supply terms.
On 16 May 2016, the Group plans the repayment of the $400m bond issued by HPF plc, mainly through existing cash reserves, while a refinancing process for the remaining bonds is under consideration.
Further crude oil price drop in 1Q16
Global crude oil supply surplus continued in 1Q16, with no agreement reached on an output freeze between OPEC members; coupled with the gradual return of Iranian crude in the market increased pressure on prices. As a result, Brent crude oil price averaged $35/bbl in 1Q16, while in the first half of February prices temporarily dropped below $30/bbl, the lowest since 2004.
US dollar has remained at the same levels as in the last quarters, with EURUSD rate averaging 1.10.
Crude oil oversupply, especially for the heavier crude grades in the Med, combined with increased gasoline demand, maintained benchmark refining margins at satisfactory levels. Benchmark Med FCC margins averaged $5.5/bbl, lower compared with last year ($6.9/bbl) with Hydrocracking margin at $5.4/bbl (2015: $7.2/bbl).
Demand decline in domestic fuels market in 1Q16
Domestic fuels demand amounted to 1.8 million tones in 1Q16, recording a 7% drop, driven by the significant decline in heating gasoil consumption (-22%), due to milder weather conditions. According to preliminary official market data, overall auto fuels demand recorded marginal growth, with diesel 4% up and gasoline down 2% vs last year.
Strong operating results
The improved performance of all Group's refineries, on higher availability and crude supply optimisation, coupled with the ability to capture opportunities in the price structure and yield of specific crude oil grades, account to a large extent for results improvement.
Aspropyrgos and Thessaloniki refineries recorded higher utilisation, improved yields and lower energy cost, resulting to increased overperformance. Elefsina refinery successfully and safely completed all scheduled maintenance works at the hydrocracker complex, with a limited impact on production and profitability and is already recording improved performance.
Petrochemicals benefited from increased sales volumes that, coupled with improved margins, led Adjusted EBITDA at €25m.
Weak demand for heating gasoil during 1Q16, was the main reason for the sales volume and profitability drop for the Marketing companies in Greece, while international subsidiaries continued to deliver strong results.
In line with Group's financial strategy, and taking into account current capital markets conditions, the Group will repay the $400m bond maturing on 16 May 2016, using existing cash reserves. Plans to refinance and improve borrowing terms for outstanding bonds are under consideration and will be implemented later in the year, subject to international capital market developments. As part of the preparation for this process, the Group agreed to a €240m Stand-By Committed Facility bond loan with Greek banks. Finally, despite the challenging environment, Group's finance costs continued to decrease, recording a 3% decline versus last year.
The regulatory approval process for the sale of 66% of DESFA shares to SOCAR, as well as a due diligence from parties interested to participate in the transaction alongside SOCAR, are in progress.
Key highlights and contribution for each of the main business units in 1Q16 were:
REFINING, SUPPLY & TRADING
- Domestic Refining, Supply & Trading 1Q16 Adjusted EBITDA at €136m.
- Production amounted to 3.8 million tonnes, with sales at 3.4m tonnes
- White products' yield at 86%.
MARKETING
- Marketing Adjusted EBITDA amounted to €11m, vs €14m LY.
- Lower heating gasoil consumption led Domestic Marketing Adjusted EBITDA to €1m. Nevertheless Domestic Marketing reported increased sales volumes in Aviation and Bunkering and improved market shares in all products in an overall declining market.
- International Marketing improved profitability vs LY, with Adjusted EBITDA at €10m, recording higher retail sales volumes in most countries where the Group operates.
PETROCHEMICALS
- Strong PP margins and increased sales volumes, led Adjusted EBITDA to €25m.
ASSOCIATED COMPANIES
- DEPA Group contribution to consolidated Net Income (adjusted for one-offs) came in at €14m, with higher volumes on increased demand from gas-fired electricity generators.
- Elpedison EBITDA at €7m on increased production. It should be noted that the performance has been affected by the absence of a CAC replacement mechanism since early 2015.
Key consolidated financial indicators (prepared in accordance with IFRS) for 1Q16 are shown below:
€ million | 1Q15 | 1Q16 | % Δ | |||
P&L figures | ||||||
Refining Sales Volumes ('000 ΜΤ) | 3,615 | 3,443 | -5% | |||
Sales | 1,879 | 1,247 | -34% | |||
EBITDA | 155 | 129 | -17% | |||
Adjusted EBITDA 1 | 205 | 169 | -17% | |||
Net Income | 17 | 32 | 84% | |||
Adjusted Net Income 1 | 54 | 70 | 30% | |||
Balance Sheet Items | ||||||
Capital Employed | 3.836 | 4.321 | 13% | |||
Net Debt | 2.085 | 2.504 | 20% | |||
Debt Gearing (ND/ND+E) | 54% | 58% | - |
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 6 countries.
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 2016 | 31 December 2015 |
ASSETS |
|
|
|
Non-current assets |
|
|
|
Property, plant and equipment | 11 | 3,363,520 | 3,385,270 |
Intangible assets | 12 | 114,111 | 117,062 |
Investments in associates and joint ventures |
| 677,918 | 678,637 |
Deferred income tax assets |
| 232,593 | 239,538 |
Available-for-sale financial assets | 3 | 3,583 | 523 |
Loans, advances and other receivables |
| 85,251 | 85,022 |
|
| 4,476,976 | 4,506,052 |
Current assets |
|
|
|
Inventories | 13 | 656,573 | 662,025 |
Trade and other receivables | 14 | 823,444 | 752,142 |
Cash, cash equivalents and restricted cash | 15 | 719,824 | 2,108,364 |
|
| 2,199,841 | 3,522,531 |
Total assets |
| 6,676,817 | 8,028,583 |
|
|
|
|
EQUITY |
|
|
|
Share capital | 16 | 1,020,081 | 1,020,081 |
Reserves | 17 | 435,020 | 443,729 |
Retained Earnings |
| 252,912 | 220,506 |
Capital and reserves attributable to owners of the parent |
| 1,708,013 | 1,684,316 |
|
|
|
|
Non-controlling interests |
| 105,038 | 105,954 |
|
|
|
|
Total equity |
| 1,813,051 | 1,790,270 |
|
|
|
|
LIABILITIES |
|
|
|
Non-current liabilities |
|
|
|
Borrowings | 18 | 1,599,621 | 1,597,954 |
Deferred income tax liabilities |
| 44,266 | 45,287 |
Retirement benefit obligations |
| 95,932 | 95,362 |
Provisions for other liabilities and charges |
| 6,532 | 6,405 |
Other long term liabilities |
| 382,183 | 22,674 |
|
| 2,128,534 | 1,767,682 |
Current liabilities |
|
|
|
Trade and other payables | 19 | 1,062,669 | 2,795,378 |
Derivative financial instruments | 3 | 39,259 | 34,814 |
Current income tax liabilities |
| 4,506 | 6,290 |
Borrowings | 18 | 1,628,155 | 1,633,033 |
Dividends payable |
| 643 | 1,116 |
|
| 2,735,232 | 4,470,631 |
Total liabilities |
| 4,863,766 | 6,238,313 |
Total equity and liabilities |
| 6,676,817 | 8,028,583 |
Group Consolidated statement of comprehensive income
|
| For the three month period ended | |
| Note | 31 March 2016 | 31 March 2015 |
|
|
|
|
Sales |
| 1,247,001 | 1,879,498 |
|
|
|
|
Cost of sales |
| (1,073,088) | (1,670,215) |
|
|
|
|
Gross profit |
| 173,913 | 209,283 |
|
|
|
|
Selling and distribution expenses |
| (69,401) | (76,354) |
|
|
|
|
Administrative expenses |
| (27,164) | (28,342) |
|
|
|
|
Exploration and development expenses |
| (2,072) | (355) |
|
|
|
|
Other operating income / (expenses) - net | 5 | 4,204 | 4,316 |
|
|
|
|
Operating profit / (loss) |
| 79,480 | 108,548 |
|
|
|
|
Finance (expenses) / income - net | 6 | (48,430) | (49,870) |
|
|
|
|
Currency exchange gains / (losses) | 7 | 11,455 | (38,934) |
|
|
|
|
Share of net result of associates | 8 | (718) | 8,101 |
|
|
|
|
Profit / (loss) before income tax |
| 41,787 | 27,845 |
|
|
|
|
Income tax (expense) / credit | 9 | (10,192) | (10,682) |
|
|
|
|
Profit / (loss) for the period |
| 31,595 | 17,163 |
|
|
|
|
Other comprehensive income: |
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
Fair value gains/(losses) on available-for-sale financial assets |
| (4,930) | (15) |
Fair value gains / (losses) on cash flow hedges | 17 | (3,156) | 4,124 |
Other movements and currency translation differences |
| (728) | (3) |
|
| (8,814) | 4,106 |
|
|
|
|
Other comprehensive (loss) / income for the period, net of tax |
| (8,814) | 4,106 |
Total comprehensive (loss) / income for the period |
| 22,781 | 21,269 |
|
|
|
|
Profit attributable to: |
|
|
|
Owners of the parent |
| 32,406 | 18,289 |
Non-controlling interests |
| (811) | (1,126) |
|
| 31,595 | 17,163 |
|
|
|
|
Total comprehensive income attributable to: |
|
|
|
Owners of the parent |
| 23,697 | 22,548 |
Non-controlling interests |
| (916) | (1,279) |
|
| 22,781 | 21,269 |
|
|
|
|
Basic and diluted earnings per share(expressed in Euro per share) | 10 | 0.11 | 0.06 |
Group Consolidated statement of cash flows
|
| For the three month period ended | |
| Note | 31 March 2016 | 31 March 2015 |
Cash flows from operating activities |
|
|
|
Cash generated from operations | 20 | (1,324,708) | (764,827) |
Income and other taxes paid |
| (1,777) | (15,101) |
Net cash generated from / (used in) operating activities |
| (1,326,485) | (779,928) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment & intangible assets |
| (25,718) | (17,239) |
Proceeds from disposal of property, plant and equipment & intangible assets |
| 142 | 78 |
Interest received |
| 1,988 | 2,435 |
Dividends received |
| - | 133 |
Net cash generated from / (used in) investing activities |
| (23,588) | (14,593) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Interest paid |
| (43,664) | (46,200) |
Dividends paid to shareholders of the Company |
| (473) | (64,002) |
Proceeds from borrowings |
| 21,923 | 215,574 |
Repayments of borrowings |
| (13,883) | (10,945) |
Net cash generated from / (used in) financing activities |
| (36,097) | 94,427 |
|
|
|
|
Net (decrease) / increase in cash, cash equivalents and restricted cash |
| (1,386,170) | (700,094) |
|
|
|
|
Cash,cash equivalents and restricted cash at the beginning of the period | 15 | 2,108,364 | 1,847,842 |
Exchange gains / (losses) on cash, cash equivalents and restricted cash |
| (2,370) | 7,460 |
Net (decrease) / increase in cash, cash equivalents and restricted cash |
| (1,386,170) | (700,094) |
Cash, cash equivalents and restricted cash at end of the period | 15 | 719,824 | 1,155,208 |
Parent Company Statement of Financial Position
ASSETS |
|
|
|
Non-current assets |
|
|
|
Property, plant and equipment | 10 | 2,760,552 | 2,774,026 |
Intangible assets | 11 | 7,680 | 8,371 |
Investments in subsidiaries, associates and joint ventures |
| 658,926 | 656,326 |
Deferred income tax assets |
| 169,138 | 177,639 |
Available-for-sale financial assets |
| 3,117 | 50 |
Loans, advances and long-term assets | 12 | 19,106 | 16,654 |
|
| 3,618,519 | 3,633,066 |
|
|
|
|
Current assets |
|
|
|
Inventories | 12 | 592,046 | 580,747 |
Trade and other receivables | 13 | 969,947 | 1,001,818 |
Cash, cash equivalents and restricted cash | 14 | 472,186 | 1,839,156 |
|
| 2,034,179 | 3,421,721 |
Total assets |
| 5,652,698 | 7,054,787 |
|
|
|
|
EQUITY |
|
|
|
Share capital | 15 | 1,020,081 | 1,020,081 |
Reserves | 16 | 430,739 | 438,818 |
Retained Earnings |
| (193,875) | (234,008) |
Total equity |
| 1,256,945 | 1,224,891 |
|
|
|
|
LIABILITIES |
|
|
|
Non- current liabilities |
|
|
|
Borrowings | 17 | 1,537,382 | 1,536,414 |
Retirement benefit obligations |
| 77,834 | 77,500 |
Provisions for other liabilities and charges |
| 3,000 | 3,000 |
Other long term liabilities |
| 372,083 | 12,400 |
|
| 1,990,299 | 1,629,314 |
Current liabilities |
|
|
|
Trade and other payables | 18 | 1,036,577 | 2,744,965 |
Derivative financial instruments |
| 39,259 | 34,814 |
Borrowings | 17 | 1,328,975 | 1,419,687 |
Dividends payable |
| 643 | 1,116 |
|
| 2,405,454 | 4,200,582 |
Total liabilities |
| 4,395,753 | 5,829,896 |
Total equity and liabilities |
| 5,652,698 | 7,054,787 |
Parent Company Statement of Comprehensive Income
|
| For the three month period ended | |
| Note | 31 March 2016 | 31 March 2015 |
|
|
|
|
Sales |
| 1,109,912 | 1,736,682 |
|
|
|
|
Cost of sales |
| (994,421) | (1,582,303) |
|
|
|
|
Gross profit |
| 115,491 | 154,379 |
|
|
|
|
Selling and distribution expenses |
| (19,484) | (27,753) |
|
|
|
|
Administrative expenses |
| (16,639) | (18,555) |
|
|
|
|
Exploration and development expenses |
| (78) | (355) |
|
|
|
|
Other operating income / (expenses) - net | 5 | 1,262 | 295 |
|
|
|
|
Dividend income |
| - | 133 |
|
|
|
|
Operating profit / (loss) |
| 80,552 | 108,144 |
|
|
|
|
Finance (expenses) / income -net | 6 | (40,228) | (40,102) |
|
|
|
|
Currency exchange gains / (losses) | 7 | 11,609 | (37,314) |
|
|
|
|
Profit / (loss) before income tax |
| 51,933 | 30,728 |
|
|
|
|
Income tax expense | 8 | (11,800) | (10,072) |
|
|
|
|
Profit / (Loss) for the period |
| 40,133 | 20,656 |
|
|
|
|
Other comprehensive income: |
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
Fair value gains/(losses) on available-for-sale financial assets |
| (4,923) | - |
Fair value gains/(losses) on cash flow hedges |
| (3,156) | 4,123 |
Other Comprehensive income/(loss) for the period, net of tax |
| (8,079) | 4,123 |
|
|
|
|
Total comprehensive income/(loss) for the period |
| 32,054 | 24,779 |
|
|
|
|
Basic and diluted earnings per share(expressed in Euro per share) | 9 | 0.13 | 0.07 |
Parent Company Statement of Cash flows
| For the three month period ended | ||
Note | 31 March 2016 | 31 March 2015 | |
Cash flows from operating activities |
|
|
|
Cash used in operations | 19 | (1,247,868) | (735,699) |
Income tax paid |
| - | (15,101) |
Net cash used in operating activities |
| (1,247,868) | (750,800) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment & intangible assets | 10,11 | (21,255) | (14,511) |
Dividends received |
| - | 133 |
Interest received | 6 | 4,252 | 6,031 |
Participation in share capital increase of affiliated companies |
| (1,400) | - |
Net cash used in investing activities |
| (18,403) | (8,347) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Interest paid |
| (41,988) | (78,703) |
Dividends paid |
| (473) | (64,002) |
Proceeds from borrowings |
| 16,000 | 237,500 |
Repayments of borrowings |
| (74,025) | (153,520) |
|
|
|
|
Net cash used in financing activities |
| (100,486) | (58,725) |
|
|
|
|
Net decrease in cash, cash equivalents and restricted cash |
| (1,366,757) | (817,872) |
|
|
|
|
Cash, cash equivalents and restricted cash at beginning of the period | 14 | 1,839,156 | 1,593,262 |
Exchange gains / (losses) on cash, cash equivalents and restricted cash |
| (213) | 7,433 |
Net decrease in cash, cash equivalents and restricted cash |
| (1,366,757) | (817,872) |
Cash, cash equivalents and restricted cash at end of the period | 14 | 472,186 | 782,823 |