Helleniq Gds S Regulatory News (HLPD)

13 Nov 2006 08:57

Hellenic Petroleum S.A.13 November 2006 November 8, 2006 NINE - MONTH 2006 FINANCIAL RESULTS (In accordance with International Financial Reporting Standards) Comparable "Clean" EBIT up 28% despite negative international refining environment Hellenic Petroleum Group reported nine-month Consolidated Net Income of €215million, corresponding to €0.70 per share (EPS). Third quarter Consolidated NetIncome amounted to €40 million, impacted by the negative course of crude oilprices at the end of the quarter. Group Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) forthe nine months of 2006 were €432 million. Key financials for the nine months of 2006, relative to the same period lastyear, were: • Sales €6,127 million, up 32 % • "Clean" EBIT €327 million, up 28 % • "Clean" Net Income €220 million, up 46 % • Earnings per share (EPS) €0.70, down 17 % • Operating cash flow measure €358 million, down 7 % • ROACE 10 % (12M: Oct 2005 - Sep 2006) • ROE 12.6 % (12M: Oct 2005 - Sep 2006) Factors affecting the nine-month 2006 results were: (a) Operational profitability: Improvement in domestic Refining, Supply & Trading operations had a significantpositive impact, providing additional EBITDA of €79 million compared to lastyear (+31%). Equally improved, albeit to a lesser extent, was the profitabilityof most business units of the Group as strategy decisions and performanceimprovement initiatives began to yield returns. As a result, comparablenine-month "Clean" EBIT (excluding effect of crude oil and product prices) washigher by 28% compared to last year, despite lower international refiningmargins. (b) Market environment: On the other hand, developments in international refining environment werenegative as benchmark refining margins continue to remain lower, compared tolast year, while crude oil prices dropped sharply towards the end of the thirdquarter. When compared to the nine-month period last year, demand for gasolineand ULSD was up in the Greek market. Finally, the •/$ exchange rate evolutionhad a small positive impact on published results. Business developments: REFINING, SUPPLY & TRADING Comparable Clean EBIT for Refining, Supply & Trading (adjusted for inventoryeffect) was €282 million, up 19%. EBIT (including inventory effect) was €275million (down 8%). Key drivers were: • Nine-month sales volume in Greece was up 3% at 11.7 million tons(3rd Quarter 3.7 million tons). OKTA sales volume in the third quarter was 262thousand tons (up 19%) while nine-month sales volume was 723 thousand tons (up9%). • Increased sales volume in higher value products such as aviationfuel, ULSD, gasoline products and asphalt, with a respective decrease in salesvolume in marine fuels and exports, resulted in better average profit margins. • Positive impact from commercial transactions improving profitabilityas well as managing the risks resulting from the volatility of internationalprices. In this respect, increased heating gasoil contango deals contributed tomitigating the impact of falling prices on compulsory safety stocks at the endof the quarter. In contrast, the impact of the weaker business environment on nine-month resultswas a negative €206 million compared to last year. The decrease was largely dueto lower average Med refining margins as well as the negative impact of crudeoil and product prices evolution. RETAIL MARKETING EKO sales volume in Greece was marginally up compared to last year at 2.878million tons (3rd quarter 0.987 million tons). Petrol station sales reported anincrease in all products with the exception of gasoline, where sales volumesremained static. Sales of aviation and marine fuels are lower than last year. Interms of profitability, third-quarter Earnings Before Tax are similar to lastyear, indicating a clear recovery from the poor performance in the first half ofthe year. The results of International Marketing continue to be positive, with higherprofitability in the third quarter in almost all markets. Total sales volume forthe nine-month period was 568 thousand tons (577 thousand tons last year), withpetrol station network sales up 15% compared to last year. The number of Groupbranded petrol stations abroad increased to 211, up 37 from the end of 2005.Also, average throughput (ATP) volumes per station are reported up from lastyear. PETROCHEMICALS Petrochemicals financial results are also higher, with sales volumes of 319thousand tons, up 12% compared to last year, and operating profits up by 161%. POWER GENERATION AND TRADING The improvement in the operation of the daily wholesale electricity market inGreece and the higher utilisation of the power plant resulted in a profitablethird quarter for Thessaloniki Power SA. In this respect, EBITDA for the thirdquarter, including cross-border trading carried out by Hellenic Petroleum,amounted to €10 million, with year-to-date EBITDA of €20 million. EXPLORATION & PRODUCTION Following initial announcements, the joint venture of HELLENIC PETROLEUM withWoodside (operator) and Repsol YPF, continues its exploration activity in theareas of Murzuk and Sirte in Libya as the two subsequent wells indicated thepresence of hydrocarbons. As already announced, the study of explorationfindings, the evaluation of expected financial results and decisions on futuredevelopments in the specific area is estimated to require a period of 12-18months. In Egypt, ratification of the Exploration and Exploitation Concession Agreementfor the West Obayed block in the Western Desert by the Egyptian Parliament isexpected in the fourth quarter. The process of establishing a branch of HELLENICPETROLEUM in Egypt has already started and will enable the Company to act as anOperator in 2006. In addition, the joint venture of HELLENIC PETROLEUM (30%), Melrose (40% -Operator) and Oil Search (30%) was awarded the rights for the Mesaha block inthe International Bid Round conducted by GANOPE in Egypt. INVESTMENT PLAN Group investments during the third quarter of 2006 amounted to €25 million (Halfyear €49 million) and related mostly to small projects for the upgrading andmaintenance of industrial sites and networks of petrol stations in Greece andabroad. The implementation of the technical study (FEED) for the Elefsina refineryupgrade, with the installation of Hydrocracker and Flexicoker units, is underwayand progressing in line with the initial plan; it is expected that the finalapproval for the implementation of this significant investment will take placewithin the next few months. The objective of this investment is the conversionof high sulphur fuel oil into ULSD and other middle distillates, which atpresent are imported by Greek refineries and wholesalers. FINANCIAL POSITION Group debt remains at same levels with half year (€1 billion), as significantcash has been committed to heating gasoil stocks (contango deals) that will besold during the fourth quarter. Debt gearing ratio (D/D&E) remains at 30%, whilethe funding for the increase in stocks was secured through a syndicatedmulti-currency loan of €300 million organized through the Group Treasurysubsidiary, Hellenic Petroleum Finance plc. As part of Group debt restructuring,a new refinancing plan is being developed which will bring the total of theGroup debt under Hellenic Petroleum Finance plc, achieving better terms andimproved liquidity management. Key Financial Indicators for the Group are attached. NINE MONTHS 2006 CONSOLIDATED KEY FINANCIAL RESULTS (Prepared in accordance with IFRS) NINE MONTHS • MILLION 2005 2006 %Net Sales 4.658 6.127 32 %EBITDA 520 432 (17 %)Clean EBIT(1) 256 327 28 %Earnings before Tax 383 315 (18 %)Net Income 259 215 (17 %)Earnings per Share (EPS) • 0,85 0.70 (17 %)Operating Cash Flow (2) 383 358 (7 %) 31.12.2005 30.9.2006 Net Debt(3) 700 1.010 --Debt Gearing (D/D+E) (3) 25% 30 % -- (1) Calculated as Earnings before Interest & Taxes (EBIT), excluding associates and inventory effect. (2) Calculated as EBITDA less capital expenditure. (3) Compared to 31.12.2005 figures. Complete IFRS financial statements are available at the website: www.hellenic-petroleum.gr Group Consolidated Balance Sheet as at 30 September 2006 As at 30 September 2006 31 December 2005ASSETSNon-current assetsProperty, plant and equipment 1.371.099 1.405.940Intangible assets 90.345 94.859Investments in affiliated companies 364.145 357.858Deferred income tax assets 35.672 42.255Available-for-sale financial assets 2.881 2.092Loans, advances and other receivables 59.123 36.078 1.923.265 1.939.082Current assetsInventories 1.267.193 1.169.098Trade and other receivables 942.382 888.079Cash and cash equivalents 177.700 193.630 2.387.275 2.250.807Total assets 4.310.540 4.189.889 EQUITYShare capital 1.019.963 1.019.963Reserves 549.896 543.642Retained Earnings 673.445 590.933Capital and reserves attributable to Company Shareholders 2.243.304 2.154.538 Minority interest 111.447 101.924 Total equity 2.354.751 2.256.462 LIABILITIESNon- current liabilitiesBorrowings 507.154 539.573Deferred income tax liabilities 21.439 18.645Retirement benefit obligations 139.548 133.747Provisions and other long term liabilities 62.540 67.348 730.681 759.313Current liabilitiesTrade and other payables 420.740 637.043Current income tax liabilities 66.520 153.045Borrowings 683.102 356.360Dividends payable 54.746 27.666 1.225.108 1.174.114Total liabilities 1.955.789 1.933.427Total equity and liabilities 4.310.540 4.189.889 Group Consolidated Income Statement for the nine months period ended 30September 2006 For the nine months period 1 July 2006 1 July 2005 ended to to 30 Sep 2006 30 Sep 2005 30 Sep 2006 30 Sep 2005 Sales 6.126.926 4.658.489 2.022.920 1.795.463Cost of sales (5.547.498) (3.987.092) (1.869.012) (1.522.251)Gross profit 579.428 671.397 153.908 273.211Selling, distribution and administrative (267.354) (255.907) (91.055) (89.291)expensesExploration and development expenses (9.387) (14.359) (4.748) (7.787)Other operating (expenses) / income - net 16.775 10.066 8.053 3.859Operating profit 319.462 411.197 66.158 179.993Finance costs -net (25.507) (14.300) (11.194) (5.908)Currency exchange gains /(losses) 12.118 (20.745) (730) (4.827)Share of operating profit of associates 8.866 7.021 5.692 2.741Profit before income tax 314.939 383.173 59.925 172.000Income tax expense (90.729) (120.271) (16.358) (51.293)Profit for the period 224.210 262.902 43.567 120.707(Less) / Add Minority Interest (9.473) (3.603) (3.439) (2.715)Net Income attributable to Equity holders of 214.737 259.299 40.128 117.992the CompanyBasic and diluted earnings per share 0,70 0,85 0,13 0,39(expressed in Euro per share) Parent Company Balance Sheet as at 30 September 2006 As at 30 Sept 2006 31 Dec 2005ASSETSNon-current assetsProperty, plant and equipment 628.686 657.028Intangible assets 23.201 26.602Investments in affiliated companies 688.054 685.070Deferred income tax assets 23.548 27.606Available-for-sale financial assets 80 80Loans, advances and other receivables 6.687 79 1.370.256 1.396.465 Current assetsInventories 1.177.187 1.071.322Trade and other receivables 665.641 726.743Cash and cash equivalents 51.012 75.956 1.893.840 1.874.021Total assets 3.264.096 3.270.486 EQUITYShare capital 1.019.963 1.019.963Reserves 549.896 543.642Retained Earnings 437.587 384.710Total equity 2.007.446 1.948.315 LIABILITIESNon- current liabilitiesBorrowings 306.041 335.187Retirement benefit obligations 113.228 108.711Provisions and other long term liabilities 40.386 46.435 459.655 490.333Current liabilitiesTrade and other payables 346.407 552.055Current income tax liabilities 55.084 135.247Borrowings 340.758 116.870Dividends payable 54.746 27.666 796.995 831.838Total liabilities 1.256.650 1.322.171Total equity and liabilities 3.264.096 3.270.486 Parent Company Income Statement for the nine month period ended 30 September2006 For the nine month period 1 July 2006 to 1 July 2005 to ended 30 Sept 2006 30 Sept 2005 30 Sept 2006 30 Sept 2005 Sales 5.699.346 4.420.511 1.830.602 1.725.740Cost of sales (5.308.147) (3.918.521) (1.750.611) (1.515.721)Gross profit 391.199 501.990 79.991 210.019Selling, distribution and administrative (135.604) (134.805) (47.040) (47.768)expensesExploration and development expenses (9.387) (14.359) (4.748) (7.787)Other operating (expenses) / income - 5.591 1.885 5.422 494netOperating profit 251.799 354.711 33.625 154.958Finance costs -net (11.860) (5.360) (5.567) (3.004)Currency exchange gains /(losses) 6.412 (19.170) (2.490) (3.994)Dividend income 13.443 15.404 0 0Profit before income tax 259.794 345.585 25.568 147.960Income tax expense (75.500) (106.658) (11.573) (46.384)Profit for the period 184.294 238.927 13.995 101.576Basic and diluted earnings per share 0,60 0,78 0,05 0,33(expressed in Euro per share) This information is provided by RNS The company news service from the London Stock Exchange