Last checked at 20 May 2011 15:30
PRESS RELEASE
May 20, 2011
FIRST QUARTER 2011 FINANCIAL RESULTS |
Adverse market environment affected Group results
Key figures for the 1Q 2011 are:
·; Adjusted EBITDA 1Q11: € 72m (1Q10: €124m)
·; EBITDA 1Q11: €165m (1Q10: €150m)
·; Adjusted Net Income 1Q11: € 45m (1Q10: € 43m)
·; Net Income 1Q11: €119m (1Q10: € 43m)
·; Adjusted EPS 1Q11: € 0.15 (1Q10: € 0.14)
·; EPS 1Q11: € 0.39 (1Q10: € 0.14)
GROUP
First quarter performance was driven by the adverse conditions that dominated the refining industry, as well as the ongoing local market crisis that significantly affected domestic marketing operations. As a result, the impact of lower margins and sales volumes led to Adjusted EBITDA of € 72m, (-42% vs 1Q10), despite improvements from Petrochemicals, transformation initiatives and tight cost controls. Adjusted Net Income at € 45m (+5% vs 1Q10) benefited from increased DEPA contribution to Group results, as well as the positive mark -to -market impact of USD denominated loans, leading to foreign exchange translation gains (€ 27m).
In terms of reported results, Net Income at € 119m (vs 1Q10 € 43m) was largely affected by a € 93m (vs €27m in 1Q10) pre-tax valuation gain on inventory as a result of increasing crude oil prices. Increasing prices also affected working capital requirements, as the Group holds over 2.5m tones of compulsory stocks on its balance sheet, leading to an increase in capital employed to € 4,8bn (+6%) and a Net Debt/Capital Employed Gearing of 48%.
John Costopoulos, Group CEO commented on the results:
"Adverse international refining environment, coupled with a challenging Greek market, affected our results. In this difficult environment we have focused our efforts on continuous cost reduction, as well as effective risk and cashflow management, consequently maintaining a strong balance sheet.
Middle East and North Africa continuing political unrest, high crude oil prices and the Greek economy issues combine to create a challenging operating environment, which is affecting our operations. In this environment, our key priority remains the substantial improvement in competitiveness through the upgrade of our refining assets, the rationalisation of our cost structure and leveraging our advantages of product/service quality, supply trading capabilities, geographical footprint and integrated marketing operations. The Thessaloniki refinery upgrade is now completed, while the erection of the new units of the Elefsina refinery is in full progress. This project is the most significant upgrade investment of the Group over the last years and the largest manufacturing investment in Greece, which will soon transform positively our Group".
Key highlights and contribution for each of the main business units were:
REFINING, SUPPLY & TRADING
- Domestic market sales volume declined by 16% as a result of the difficult market environment. However, white products (mostly MOGAS) and marine fuels sales increased.
- As a result of lower sales volume and weaker refining margins, Greek refining Adjusted EBITDA was €41m (1Q10: € 89m), despite the positive impact of cost controls and transformation initiatives.
- OKTA's refining activity in FYROM contributed € 5m in EBITDA to Group results, while sales were up by 6%.
DOMESTIC MARKETING
- Greek economy issues affected domestic marketing businesses (EKO and HELLENIC FUELS), putting pressure on both volumes and margins and leading to a reported EBITDA of € 12m (1Q10: € 27m).
- Integration synergies and tight cost controls partly mitigated the decline in profitability.
INTERNATIONAL MARKETING
- Softer market conditions, in most countries where the Group has a presence, challenged the international marketing units. Against a difficult background, Group subsidiaries maintained sales volumes and EBITDA came in at € 7m (vs € 8m 1Q10).
PETROCHEMICALS
- Strong Polypropylene margins, the main profitability driver of the Chemicals activity, offset the impact of lower sales volumes, leading to an EBITDA of € 18m (1Q10: € 8m).
ASSOCIATED COMPANIES
- The ELPEDISON joint venture's second gas -fired power plant in Thisvi has now been on stream for a full quarter; Net Income contribution turned positive in 1Q2011
- DEPA's contribution to Group's results of € 24m (vs € 14m 1Q10); mainly driven by higher natural gas sales volume
Thessaloniki refinery upgrade was completed and the refinery is now ready for start-up. Significant progress was achieved on the Elefsina refinery upgrade project which is 84% completed. These projects account for most of the capital investment of € 91m in Q1.
Key consolidated financial indicators (prepared in accordance with IFRS) for the quarter ended March 31, 2011 are shown below:
(€ million) | 1Q10 | 1Q11 |
P&L figures | ||
Net Sales | 2,134 | 2,419 |
EBITDA | 150 | 165 |
Adjusted EBITDA 1 | 124 | 72 |
Net Income | 43 | 119 |
Adjusted Net Income 1 | 43 | 45 |
EPS (€) | 0.14 | 0.39 |
Adjusted EPS (€) 1 | 0.14 | 0.15 |
Balance Sheet Items | FY10 | 1Q11 |
Capital Employed | 4,191 | 4,768 |
Net Debt | 1,659 | 2,203 |
Debt Gearing (D/D+E) | 41% | 48% |
Notes:
1. Calculated as Reported less the inventory effects and other non-operating items.
Notes 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 in 10 countries. Its shares are primarily listed on the Athens Exchange (ATHEX: ELPE), and its market capitalisation amounts to about € 2.2 billion.
Further information:
E. Stranis, PR and Corporate Affairs Director
Tel.: +30-210-6302241
Email: estranis@helpe.gr
V. Tsaitas, Investor Relations Officer
Tel.: +30-210-6302399
Email: vtsaitas@helpe.gr
Website: http://www.helpe.gr
Group Condensed Interim Consolidated Statement of Financial Position
| As at | |
31 March 2011 | 31 December 2010 | |
ASSETS | ||
Non-current assets | ||
Property, plant and equipment | 2.721.294 | 2.668.495 |
Intangible assets | 166.691 | 165.148 |
Investments in associates and joint ventures | 585.575 | 560.783 |
Deferred income tax assets | 41.512 | 38.827 |
Available-for-sale financial assets | 2.069 | 2.078 |
Loans, advances and other receivables | 121.124 | 123.454 |
3.638.265 | 3.558.785 | |
Current assets | ||
Inventories | 1.881.318 | 1.600.625 |
Trade and other receivables | 1.116.547 | 938.837 |
Held to maturity securities | 167.968 | 167.968 |
Cash and cash equivalents | 432.402 | 595.757 |
3.598.235 | 3.303.187 | |
Total assets | 7.236.500 | 6.861.972 |
EQUITY | ||
Share capital | 1.020.081 | 1.020.081 |
Reserves | 411.927 | 500.066 |
Retained Earnings | 985.703 | 866.737 |
Capital and reserves attributable to owners of the parent | 2.417.711 | 2.386.884 |
Non-controlling interests | 147.601 | 144.734 |
Total equity | 2.565.312 | 2.531.618 |
LIABILITIES | ||
Non-current liabilities | ||
Borrowings | 1.112.206 | 1.127.878 |
Deferred income tax liabilities | 50.356 | 50.796 |
Retirement benefit obligations | 145.419 | 143.414 |
Long term derivatives | 140.116 | 66.296 |
Provisions and other long term liabilities | 51.184 | 49.909 |
1.499.281 | 1.438.293 | |
Current liabilities | ||
Trade and other payables | 1.338.049 | 1.472.712 |
Current income tax liabilities | 137.799 | 119.227 |
Borrowings | 1.693.040 | 1.297.103 |
Dividends payable | 3.019 | 3.019 |
3.171.907 | 2.892.061 | |
Total liabilities | 4.671.188 | 4.330.354 |
Total equity and liabilities | 7.236.500 | 6.861.972 |
Group Consolidated Statement of Comprehensive Income
| For the three month period ended | |
| 31 March 2011 | 31 March 2010 |
Sales | 2.419.481 | 2.134.222 |
Cost of sales | (2.192.668) | (1.907.975) |
Gross profit | 226.813 | 226.247 |
Selling, distribution and administrative expenses | (107.978) | (113.243) |
Exploration and development expenses | (714) | (12.206) |
Other operating (expenses) / income - net | 9.326 | 10.917 |
Operating profit | 127.447 | 111.715 |
Finance (expenses) / income - net | (16.558) | (13.238) |
Currency exchange gains / (losses) | 26.823 | (22.116) |
Share of net result of associates and dividend income | 24.491 | 11.681 |
Profit/(loss) before income tax | 162.203 | 88.042 |
Income tax (expense) / credit | (40.420) | (43.449) |
Profit/(loss) for the period | 121.783 | 44.593 |
Other comprehensive income: | ||
Fair value gains/(losses) on available-for-sale financial assets | - | 6 |
Unrealised gains / (losses) on revaluation of hedges | (88.355) | (38) |
Currency translation differences on consolidation of subsidaries | 266 | 1.961 |
Other Comprehensive income/(loss) for the period, net of tax | (88.089) | 1.929 |
Total comprehensive income/(loss) for the period | 33.694 | 46.522 |
Profit attributable to: | ||
Owners of the parent | 118.966 | 42.805 |
Non-controlling interests | 2.817 | 1.788 |
121.783 | 44.593 | |
Total comprehensive income attributable to: | ||
Owners of the parent | 30.827 | 45.034 |
Non-controlling interests | 2.867 | 1.488 |
33.694 | 46.522 | |
Basic and diluted earnings per share(expressed in Euro per share) | 0,39 | 0,14 |
Group Consolidated Statement of Cash Flows
| For the three month period ended | |
| 31 March 2011 | 31 March 2010 |
Cash flows from operating activities |
|
|
Cash generated from operations | (468.558) | (381.158) |
Income and other taxes paid | (3.949) | (1.039) |
Net cash used in operating activities | (472.507) | (382.197) |
Cash flows from investing activities |
|
|
Purchase of property, plant and equipment & intangible assets | (90.600) | (97.159) |
Proceeds from disposal of property, plant and equipment & intangible assets | 84 | 57 |
Interest received | 5.219 | 6.562 |
Investments in associates - net | (300) | - |
Net cash used in investing activities | (85.597) | (90.540) |
Cash flows from financing activities |
|
|
Interest paid | (21.244) | (19.800) |
Dividends paid to shareholders of the Company | - | (18) |
Proceeds from borrowings | 557.989 | 668.288 |
Repayments of borrowings | (142.910) | (286.427) |
Net cash generated from financing activities | 393.835 | 362.043 |
Net decrease in cash & cash equivalents | (164.269) | (110.694) |
Cash & cash equivalents at the beginning of the period | 595.757 | 491.196 |
Exchange gains on cash & cash equivalents | 914 | 1.661 |
Net decrease in cash & cash equivalents | (164.269) | (110.694) |
Cash & cash equivalents at end of the period | 432.402 | 382.163 |
Parent Company Condensed Interim Statement of Financial Position
| As at | |
31 March 2011 | 31 December 2010 | |
ASSETS | ||
Non-current assets | ||
Property, plant and equipment | 1.965.234 | 1.901.566 |
Intangible assets | 14.238 | 9.971 |
Investments in affiliated companies | 689.748 | 689.718 |
Deferred income tax assets | 22.872 | 21.701 |
Available-for-sale financial assets | 41 | 41 |
Loans, advances and other receivables | 1.406 | 1.406 |
2.693.539 | 2.624.403 | |
Current assets | ||
Inventories | 1.690.636 | 1.425.693 |
Trade and other receivables | 935.542 | 765.858 |
Held to maturity securities | 167.968 | 167.968 |
Cash and cash equivalents | 82.455 | 220.000 |
2.876.601 | 2.579.519 | |
Total assets | 5.570.140 | 5.203.922 |
EQUITY | ||
Share capital | 1.020.081 | 1.020.081 |
Reserves | 406.708 | 495.063 |
Retained Earnings | 493.714 | 392.397 |
Total equity | 1.920.503 | 1.907.541 |
LIABILITIES | ||
Non- current liabilities | ||
Borrowings | 799.315 | 815.142 |
Retirement benefit obligations | 109.186 | 107.917 |
Long term derivatives | 140.116 | 66.296 |
Provisions and other long term liabilities | 22.982 | 23.729 |
1.071.599 | 1.013.084 | |
Current liabilities | ||
Trade and other payables | 1.274.896 | 1.377.367 |
Current income tax liabilities | 118.961 | 99.326 |
Borrowings | 1.181.181 | 803.604 |
Dividends payable | 3.000 | 3.000 |
2.578.038 | 2.283.297 | |
Total liabilities | 3.649.637 | 3.296.381 |
Total equity and liabilities | 5.570.140 | 5.203.922 |
Parent Company Statement of Comprehensive Income
| For the three month period ended | |
| 31 March 2011 | 31 March 2010 |
Sales | 2.233.799 | 1.932.765 |
Cost of sales | (2.068.455) | (1.794.682) |
Gross profit | 165.344 | 138.083 |
Selling, distribution and administrative expenses | (40.854) | (39.112) |
Exploration and development expenses | (714) | (12.204) |
Other operating income/(expenses) - net | 1.905 | 3.239 |
Operating profit | 125.681 | 90.006 |
Finance (expenses)/income -net | (8.234) | (7.179) |
Currency exchange (losses)/gains | 23.062 | (19.956) |
Profit/(loss) before income tax | 140.509 | 62.871 |
Income tax expense | (39.192) | (36.010) |
Profit/(loss) for the period | 101.317 | 26.861 |
Other comprehensive income: | ||
Unrealised (losses)/gains on revaluation of hedges | (88.355) | (38) |
Other Comprehensive (loss)/income for the period, net of tax | (88.355) | (38) |
Total comprehensive income/(loss) for the period | 12.962 | 26.823 |
Basic and diluted earnings per share (expressed in Euro per share) | 0,33 | 0,09 |
Parent Company Statement of Cash Flows
| For the three month period ended | |
| 31 March 2011 | 31 March 2010 |
Cash flows from operating activities |
|
|
Cash used in operations | (440.067) | (317.511) |
Income and other taxes paid | - | - |
Net cash used in operating activities | (440.067) | (317.511) |
Cash flows from investing activities |
|
|
Purchase of property, plant and equipment & intangible assets | (87.467) | (90.621) |
Interest received | 2.706 | 675 |
Participation in share capital increase of affilated companies | (30) | - |
Net cash used in investing activities | (84.791) | (89.946) |
Cash flows from financing activities |
|
|
Interest paid | (10.108) | (7.854) |
Repayments of borrowings | (192.012) | (57.255) |
Proceeds from borrowings | 588.490 | 399.664 |
Net cash generated from financing activities | 386.370 | 334.555 |
Net decrease in cash & cash equivalents | (138.488) | (72.902) |
Cash & cash equivalents at beginning of the period | 220.000 | 127.809 |
Exchange gains on cash & cash equivalents | 943 | 1.491 |
Net decrease in cash & cash equivalents | (138.488) | (72.902) |
Cash & cash equivalents at end of the period | 82.455 | 56.398 |