Last checked at 23 Feb 2012 15:43
PRESS RELEASE
23 February, 2012
FULL YEAR/FOURTH QUARTER 2011 FINANCIAL RESULTS |
Positive results, despite challenging environment
Key figures for the FY and 4Q period to 31 December 2011 are:
·; EBITDA FY11: €375m (FY10: €507m)
(excl. restructuring charges) 4Q11: € 36m (4Q10: €122m)
·; Adjusted EBITDA FY11: €363m (FY10: €474m)
4Q11: € 76m (4Q10: € 86m)
·; Reported Net Income FY11: €114m (FY10: €180m)
4Q11: €-48m (4Q10: € 50m)
·; Adjusted Net Income FY11: €137m (FY10: €205m)
4Q11: € 17m (4Q10: € 35m)
·; Reported EPS FY11: € 0.37 (FY10: €0.59)
4Q11: €-0.16 (4Q10: €0.16)
·; Adjusted EPS FY11: €0.45 (FY10: €0.67)
4Q11: €0.05 (4Q10: €0.11)
·; DPS FY11: €0.45 (FY10: €0.45)
2011 GROUP RESULTS OVERVIEW
Business Environment
Refining margins remained weak during the year with FCC cracking benchmark margin at $2.86/bbl ($4.37/bbl in 2010), with recordhistoricallows in 4Q driven by weak demand and lower gasoline and naphtha cracks. Simple refining margins were also lower, albeit without significant impact on Group's performance as Elefsina and Thessaloniki remained closed for most of the year due to the upgrade projects.
International concerns over crude oil supply chain issues, at first due to Libya and lately due to Iran supported high prices with Brent averaging $111/bbl, leading to an increase in working capital requirements.
Greek crisis and the full year impact of higher consumption taxes imposed in 2010, led to further demand decline in the domestic market. Auto fuels and C&I sales recorded an estimated 11% drop while heating gasoil increase was driven mainly by weather conditions. At the same time, retail margins remain under pressure as domestic marketing companies focused on maintenance of sales volumes.
Positive results despite difficult conditions:
Hellenic Petroleum reported a positive set of results, despite the challenging conditions for European refiners, a difficult Greek market and shut-downs for maintenance and upgrades. Group Adjusted EBITDA was €363m (-23% vs FY10) with Adjusted Net Income at €137m (-33% vs FY10). Negative impact of lower margins and volumes was partly offset by positive performance from Supply and Trading and cost control; International Marketing recorded market share gains. The results of DEPA and ELPEDISON were supported by increased natural gas-fired units participation in power generation.
Focus remained on improving competitiveness with 2011 consolidated operating costs 8% down vs last year. An additional 4% like for like reduction will be reported in 2012, following reorganisation of head office functions and domestic marketing operations implemented in December 2011 with a €40m one-off effect on 4Q11 results. Continuous reorganisation, along with other transformation initiatives in marketing, such as the supply chain optimisation with the closure of 4 terminals in 4Q, operational improvements in refining and procurement savings led to annualised cash benefits of €165m to date as well as improved safety and environmental performance.
In 2011 the Group continued its portfolio optimisation strategy with the sale of its non-core activities in Georgia, while the farm-out of the West Obayed upstream concession received final regulatory approval by the Egyptian Authorities.
Strong balance sheet, proactive cash flow planning and working capital management supported the significant progress on our investment plan with the completion of the upgrade and start-up of Thessaloniki refinery, while the Elefsina refinery upgrade is at 97% completion.
Based on 2011 results and the Group's performance forecast for 2012, the Board has proposed to maintain the full year dividend at €0.45 per share.
Key highlights and contribution for each of the main business units were:
REFINING, SUPPLY & TRADING
- Upgrade projects affected production and weak domestic demand resulted in lower sales volume.
- Domestic Refining Adjusted EBITDA at €249m (-24%); weak refining margins in 2H were partly mitigated by strong Supply & Trading performance.
- Cost control efforts and reduced bad debt provisions due to tight credit management also supported profitability.
DOMESTIC MARKETING
- Lower volumes and weaker margins reflected market conditions, leading to an Adjusted EBITDA of €21m (-68%).
- Ground fuels business particularly affected by Greek recession; Aviation fuels provided some support.
- Successful new product launches ("Ekonomy 95" and "BP Ultimate 95") and enhanced marketing and sales efforts increased customer value proposition and improved market shares.
INTERNATIONAL MARKETING
- Despite deteriorating macro environment affecting demand in most markets, profitability was sustained, with Adjusted EBITDA at €45m (vs €48m FY10); Improved margins and cost control drove performance.
- Cyprus performance resilient despite adverse macro environment, while JPK, despite retail market share gains, reported a drop in profits due to reduced demand in the wholesale business.
- Profitability increase in Serbia on strong margins and volumes. Bulgaria gained market share, however profitability slowed on weak margins which prevailed until late in the year.
PETROCHEMICALS
- Polypropylene sales volumes were affected by maintenance and upgrades. Margins and international prices receded in 2H reflecting a decline in international demand, resulting to a FY11 Adjusted EBITDA of €44m (FY10: €50m).
ASSOCIATED COMPANIES
- DEPA contribution to Group results reached €67m (vs €32m in FY10) reflecting higher sales volumes due to increased gas-fired energy production and improved performance of local supply and distribution subsidiaries.
- Weather conditions and higher natural gas electricity generation supported ELPEDISON profitability despite a drop in GDP; FY11 EBITDA at €61m (vs €18m in FY10) with Net Income contribution to ELPE at €2m.
Commenting on the results, Hellenic Petroleum's CEO, John Costopoulos, stated:
"2011 was a challenging year due to the weak international refining environment and the on-going recession in Greece. Within this background our performance remains positive. Our focus on strengthening competitiveness through reorganisation, cost control, optimisation, risk management and asset upgrades is yielding substantial benefits to the business, that will become more visible in 2H12 as our refineries upgrade execution is on track. 2012 will be a positive turning point for the Group's earnings generation capability and shareholder value creation. Timely and flawless start-up of the upgraded Elefsina refinery remains our top priority for the next few months."
Key consolidated financial indicators (prepared in accordance with IFRS) for the three and twelve-month period to 31 December 2011 are shown below:
€ million | 4Q10 | 4Q11 | % Δ | FY10 | FY11 | % Δ | |
P&L figures | |||||||
Net Sales | 2,297 | 2,500 | 9% | 8,477 | 9,308 | 10% | |
EBITDA | 122 | -4 | - | 501 | 335 | -33% | |
Adjusted EBITDA 1 | 86 | 76 | -11% | 474 | 363 | -23% | |
Net Income | 50 | -48 | - | 180 | 114 | -37% | |
Adjusted Net Income 1 | 35 | 17 | -53% | 205 | 137 | -33% | |
EPS (€) | 0.16 | -0.16 | - | 0.59 | 0.37 | -37% | |
Adjusted EPS (€) 1 | 0.11 | 0.05 | -53% | 0.67 | 0.45 | -33% | |
DPS (€) | 0.45 | 0.45 | - | ||||
Balance Sheet Items | |||||||
Capital Employed | 4,191 | 4,217 | 1% | ||||
Net Debt | 1,659 | 1,687 | 2% | ||||
Debt Gearing (D/D+E) | 40% | 40% |
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 9 countries. Its shares are primarily listed on the Athens Exchange (ATHEX: ELPE), with its market capitalisation amounting to c.€1.8 billion.
Further information:
V. Tsaitas, Investor Relations Officer
Tel.: +30-210-6302399
Email: vtsaitas@helpe.gr
E. Stranis, Corporate Affairs Director
Tel.: +30-210-6302241
Email: estranis@helpe.gr
G. Stanitsas, Communications Director
Tel.: +30-210-6302197
Email: gstanitsas@helpe.gr
Group Consolidated Statement of Financial Position
As at | ||
31 December 2011 | 31 December 2010 | |
ASSETS | ||
Non-current assets | ||
Property, plant and equipment | 3.204.096 | 2.668.495 |
Intangible assets | 177.875 | 205.008 |
Investments in associates and joint ventures | 616.095 | 560.783 |
Deferred income tax assets | 19.969 | 38.827 |
Available-for-sale financial assets | 2.062 | 2.078 |
Loans, advances and other receivables | 96.235 | 87.850 |
4.116.332 | 3.563.041 | |
Current assets | ||
Inventories | 1.141.191 | 1.600.625 |
Trade and other receivables | 945.818 | 937.879 |
Held to maturity securities | - | 167.968 |
Cash and cash equivalents | 985.486 | 595.757 |
3.072.495 | 3.302.229 | |
Total assets | 7.188.827 | 6.865.270 |
EQUITY | ||
Share capital | 1.020.081 | 1.020.081 |
Reserves | 493.142 | 500.066 |
Retained Earnings | 884.374 | 866.737 |
Capital and reserves attributable to owners of the parent | 2.397.597 | 2.386.884 |
Non-controlling interests | 132.393 | 144.734 |
Total equity | 2.529.990 | 2.531.618 |
LIABILITIES | ||
Non- current liabilities | ||
Borrowings | 1.142.296 | 1.133.196 |
Deferred income tax liabilities | 49.134 | 50.796 |
Retirement benefit obligations | 113.991 | 143.414 |
Derivative financial instruments | 50.158 | 66.296 |
Provisions and other long term liabilities | 59.588 | 47.494 |
1.415.167 | 1.441.196 | |
Current liabilities | ||
Trade and other payables | 1.686.950 | 1.472.712 |
Current income tax liabilities | 22.403 | 119.227 |
Borrowings | 1.531.893 | 1.297.498 |
Dividends payable | 2.424 | 3.019 |
3.243.670 | 2.892.456 | |
Total liabilities | 4.658.837 | 4.333.652 |
Total equity and liabilities | 7.188.827 | 6.865.270 |
Group Consolidated Statement of Comprehensive Income
For the year ended | ||
31 December 2011 | 31 December 2010 | |
Sales | 9.307.582 | 8.476.805 |
Cost of sales | (8.657.489) | (7.666.726) |
Gross profit | 650.093 | 810.079 |
Selling, distribution and administrative expenses | (466.638) | (480.812) |
Exploration and development expenses | (3.556) | (20.660) |
Other operating (expenses) / income- net | (4.890) | 35.306 |
Operating profit | 175.009 | 343.913 |
Finance (expenses) / income- net | (68.371) | (59.434) |
Currency exchange gains / (losses) | (10.697) | (15.793) |
Share of net result of associates and dividend income | 67.488 | 30.027 |
Profit before income tax | 163.429 | 298.713 |
Income tax (expense) / credit | (45.763) | (111.294) |
Profit for the year | 117.666 | 187.419 |
Other comprehensive income: | ||
Fair value gains / (losses) on available-for-sale financial assets | (72) | 44 |
Unrealised gains / (losses) on revaluation of hedges | (12.908) | (25.188) |
Currency translation differences on consolidation of subsidiaries | (40) | 639 |
Other Comprehensive (loss) / income for the year, net of tax | (13.020) | (24.505) |
Total comprehensive income for the year | 104.646 | 162.914 |
Profit attributable to: | ||
Owners of the parent | 114.150 | 179.818 |
Non-controlling interests | 3.516 | 7.601 |
117.666 | 187.419 | |
Total comprehensive income attributable to: | ||
Owners of the parent | 101.286 | 155.773 |
Non-controlling interests | 3.360 | 7.141 |
104.646 | 162.914 | |
Basic and diluted earnings per share(expressed in Euro per share) | 0,37 | 0,59 |
Group Consolidated Statement of Cash Flows
For the year ended | ||
31 December 2011 | 31 December 2010 | |
Cash flows from operating activities | ||
Cash generated from operations | 843.476 | 719.272 |
Income and other taxes paid | (43.182) | (13.552) |
Net cash generated from operating activities | 800.294 | 705.720 |
Cash flows from investing activities | ||
Purchase of property, plant and equipment & intangible assets | (674.964) | (709.338) |
Proceeds from disposal of property, plant and equipment & intangible assets | 3.108 | 8.986 |
Acquisition of subsidiary (ex BP Hellas), net of cash acquired | - | 10.901 |
Proceeds from the sale of EKO Georgia, net of cash owned | 6.059 | - |
Grants received | - | 131 |
Interest received | 25.777 | 13.270 |
Dividends received | 5.976 | 4.462 |
Participation in share capital (increase) / decrease of associates | (775) | (17.720) |
Net cash used in investing activities | (634.819) | (689.308) |
Cash flows from financing activities | ||
Interest paid | (91.323) | (72.061) |
Dividends paid to shareholders of the Company | (85.079) | (137.369) |
Dividends paid to non-controlling interests | (2.739) | (3.652) |
Repayments / (Acquisitions) of held-to-maturity securities | 167.968 | (167.968) |
Proceeds from borrowings | 932.551 | 662.122 |
Repayments of borrowings | (702.158) | (191.354) |
Net cash generated from financing activities | 219.220 | 89.718 |
Net increase in cash & cash equivalents | 384.695 | 106.130 |
Cash & cash equivalents at the beginning of the year | 595.757 | 491.196 |
Exchange gains / (losses) on cash & cash equivalents | 5.034 | (1.569) |
Net increase in cash & cash equivalents | 384.695 | 106.130 |
Cash & cash equivalents at end of the year | 985.486 | 595.757 |
Parent Company Statement of Financial Position
As at | ||
31 December 2011 | 31 December 2010 | |
ASSETS | ||
Non-current assets | ||
Property, plant and equipment | 2.471.921 | 1.901.566 |
Intangible assets | 13.412 | 9.971 |
Investments in affiliated companies | 665.404 | 689.718 |
Deferred income tax assets | - | 21.701 |
Available-for-sale financial assets | 41 | 41 |
Loans, advances and other receivables | 3.843 | 1.406 |
3.154.621 | 2.624.403 | |
Current assets | ||
Inventories | 994.893 | 1.425.693 |
Trade and other receivables | 868.601 | 765.858 |
Held to maturity securities | - | 167.968 |
Cash and cash equivalents | 563.282 | 220.000 |
2.426.776 | 2.579.519 | |
Total assets | 5.581.397 | 5.203.922 |
EQUITY | ||
Share capital | 1.020.081 | 1.020.081 |
Reserves | 488.096 | 495.063 |
Retained Earnings | 408.648 | 392.397 |
Total equity | 1.916.825 | 1.907.541 |
LIABILITIES | ||
Non- current liabilities | ||
Borrowings | 837.603 | 815.142 |
Deferred income tax liabilities | 509 | - |
Retirement benefit obligations | 86.027 | 107.917 |
Derivative financial instruments | 50.158 | 66.296 |
Provisions and other long term liabilities | 39.213 | 23.729 |
1.013.510 | 1.013.084 | |
Current liabilities | ||
Trade and other payables | 1.568.241 | 1.377.367 |
Current income tax liabilities | 15.140 | 99.326 |
Borrowings | 1.065.276 | 803.604 |
Dividends payable | 2.405 | 3.000 |
2.651.062 | 2.283.297 | |
Total liabilities | 3.664.572 | 3.296.381 |
Total equity and liabilities | 5.581.397 | 5.203.922 |
Parent Company Statement of Comprehensive Income
For the year ended | ||
31 December 2011 | 31 December 2010 | |
Sales | 8.592.359 | 7.681.580 |
Cost of sales | (8.223.407) | (7.193.483) |
Gross profit | 368.952 | 488.097 |
Selling, distribution and administrative expenses | (172.426) | (186.922) |
Exploration and development expenses | (3.556) | (20.660) |
Other operating income/(expenses) - net | (20.244) | 2.228 |
Dividend income | 15.819 | 11.879 |
Operating profit | 188.545 | 294.622 |
Finance (expenses)/income -net | (26.201) | (32.561) |
Currency exchange (losses)/gains | (5.552) | (14.308) |
Profit/(loss) before income tax | 156.792 | 247.753 |
Income tax expense | (44.028) | (93.800) |
Profit/(loss) for the year | 112.764 | 153.953 |
Other comprehensive income: | ||
Unrealised gains/(losses) on revaluation of hedges | (12.908) | (25.188) |
Other Comprehensive (loss) / income for the year, net of tax | (12.908) | (25.188) |
Total comprehensive income for the year | 99.856 | 128.765 |
Basic and diluted earnings per share (expressed in Euro per share) | 0,37 | 0,50 |
Parent Company Statement of Cash Flows
For the year ended | ||
31 December 2011 | 31 December 2010 | |
Cash flows from operating activities | ||
Cash (used in) / generated from operations | 658.656 | 654.331 |
Income and other taxes paid | (23.945) | (1.425) |
Net cash generated from operating activities | 634.711 | 652.906 |
Cash flows from investing activities | ||
Purchase of property, plant and equipment & intangible assets | (649.983) | (676.754) |
Proceeds from disposal of property, plant and equipment & intangible assets | 142 | - |
Grants received | - | 131 |
Dividends received | 14.312 | 11.844 |
Interest received | 13.649 | 4.273 |
Participation in share capital decrease / (increase) of affilated companies | 13.214 | 6.230 |
Purchases of available-for-sale financial assets | - | (20) |
Net cash used in investing activities | (608.666) | (654.296) |
Cash flows from financing activities | ||
Interest paid | (36.612) | (37.024) |
Dividends paid | (85.067) | (137.369) |
Repayments / (Acquisitions) of held-to-maturity financial assets | 167.968 | (167.968) |
Repayments of borrowings | (1.015.999) | (324.542) |
Proceeds from borrowings | 1.281.179 | 762.253 |
Net cash generated from financing activities | 311.469 | 95.350 |
Net increase in cash & cash equivalents | 337.515 | 93.960 |
Cash & cash equivalents at beginning of the year | 220.000 | 127.809 |
Exchange gains on cash & cash equivalents | 5.767 | (1.769) |
Net increase in cash & cash equivalents | 337.515 | 93.960 |
Cash & cash equivalents at end of the year | 563.282 | 220.000 |