Helleniq Gds S Regulatory News (HLPD)

22 Feb 2007 09:36

Hellenic Petroleum S.A.22 February 2007 PRESS RELEASE February 21, 2007 FULL YEAR 2006 FINANCIAL RESULTS (In accordance with International Financial Reporting Standards) Reported net income of €260m, FY06 DPS of €0.43 and "clean" net income up 45%, despite the adverse global refining environment 2006 Consolidated Net Income reached €260m, corresponding to €0.85 per share(EPS). Adjusting for inventory gains/losses, "clean" net income rose 45% y-o-yto €277m. Group Earnings before Interest, Tax, Depreciation and Amortization(EBITDA) in 2006 amounted to €502m on a reported basis, while on a comparable, "clean" basis, they grew 45% to €526m. Hellenic Petroleum's Board of Directors will recommend to the forthcoming AGMthe payment of a final dividend of €0.28 per share. Including the interimdividend of €0.15 per share which was paid out in December 2006, this brings thetotal dividend for 2006 at €0.43 per share and implies a total yield of 3.9%(based on yesterday's closing share price). Key financials for 2006, relative to the same period last year, were as follows: • Revenues grew 22% to €8,122m • EBT of €358m, lower by 28% • Net profits amounted to €260m, down 22% • Earnings per share of €0.85, a 22% decrease • "Clean" EBT rose 32% to €382m • "Clean" net income of €277m, a 45% increase • ROACE of 8.7% • ROE of 11.7% Main factors affecting the 2006 results: (a) Improvement in underlying operating profitability: a. Increased contribution by the Supply & Trading business unit, as well asfrom an effective risk management in the face of falling oil prices. b. Continuation of cost containment measures, with operating expenses flatfor a third consecutive year, with "self-help" for the 2004-06 period amountingto around €75m. c. Improved performances by Petrochemicals and International Marketingactivities. d. Positive contribution from the first full-year of operations of the powergeneration and trading activities. e. Significant gains from debt restructuring and effective management of FXrisk. (b) Adverse international refining environment vis-a-vis 2005: f. Crude oil and product prices fell considerably, thus reversing theexceptionally positive inventory gains (€205m) of 2005 into a loss of €24m. g. At the same time, benchmark refining margins were lower y-o-y, thusadversely impacting the profitability of our core Refining business. h. Slight weakening of the USD versus the EUR, with obvious negativetranslation effects. (c) Greek wholesale oil products market: up 3.4% in total i. Sales of gasoline and automotive diesel were higher by 3.4% and 6.1%,respectively. j. Heating gasoil volume sales were down 0.7%. k. Aviation and bunker fuels posted 7.7% and 6.2% increases, respectively. Key business developments for 2006: REFINING, SUPPLY & TRADING Refining, Supply & Trading dominates group results, accounting for approximately83% of total pre-tax profits. In contrast to the previous year, 2006 resultswere negatively affected by the fall in crude oil and product prices towardsyear-end and the corresponding inventory losses. On a reported basis, EBITDAreached €373m (2005: €599m), while on a "clean" basis (ie adjusted for theinventory effect) were €397m (compared to €394m in 2005). Key drivers for 2006 were: l. Increased volume sales by Greek refineries, which rose 2% to 15.9mtonnes. OKTA volumes grew 15% to 1.1m tonnes. m. Positive impact to profitability from successful trading and risk managementtransactions, taking advantage of the market's structure (contango) and thelarge storage capacity of the Elefsina refinery. In this respect, higherprovisionally priced stocks contributed to mitigating the impact of fallingprices on compulsory safety stocks at the end of the year. n. Improved Safety, Hygiene and Environmental indicators: LWIF index of 2.92in 2006 vs 3.5 in 2005 RETAIL MARKETING EKO sales volume in Greece was marginally up (+1%) compared to last year to 4mtonnes, as domestic sales were higher and sales of aviation and marine fuelswere slightly lower than 2005. The performance in the last two quarters of theyear partially counterbalanced the negative impact witnessed in the first halfof 2006, thus FY EBITDA amounted to €47m, a 10% y-o-y drop. In line with our strategy, in 2006 10 Calypso retail sites, which are fullycompany-owned/company- operated, were added to our branded petrol stationnetwork. Early indications are significantly encouraging, as these petrolstations, aside from their added contribution to group profitability, aid in theoverall management of the network. The results of International Marketing continue to be positive, with salesgrowing 15% vs 2005. Our foreign retail, aviation and industrial volume salesamounted to 0.8m tonnes in total. Note that the key markets of Serbia andBulgaria posted volume sales increase of approximately 80%, as we continue todevelop our network of petrol stations. The number of group branded petrolstations abroad increased to 219, up 32% from the end of 2005. Finally, asstated in the past, note that we continue to closely monitor developmentssurrounding the planned sale of the Serbian state-owned refinery, NIS. Followingthe country's recent general elections, the sale of NIS is expected to soonfollow through. PETROCHEMICALS The increase in sales, a tight grip on operating expenses and the lack of anysignificant provisions led to a sharp improvement in the profitability ofPetrochemicals; EBITDA grew 48% to €39m. POWER GENERATION AND TRADING On the back of significantly higher utilisation rates in the second half of theyear, particularly during the fourth quarter, Thessaloniki Power SA managed toreverse the negative performance seen in early-2006. In its first year ofoperations, power generation & trading posted total revenues, includingcross-border trading, of €145m, while EBITDA amounted to €31m. EXPLORATION & PRODUCTION In line with our stated strategic priorities, our focus in E&P lies in thecontinuation of our drilling campaign in Libya, the initiation of explorationactivities in Egypt and the monitoring of international markets for a possibleacquisition of a producing asset. 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, where several wells indicated the presenceof hydrocarbons. In 2006, the cost of our drilling campaign amounted to €16m. Asalready announced, the study of exploration findings, the evaluation of expectedcommerciality and decisions on future developments in the specific area isestimated to require a period of 12-18 months. In Egypt, a local branch has been established and staffed to initiateexploration activities in the West Obayed block, in the Western Desert, in whichHellenic Petroleum is the operator. In addition, the joint venture of HellenicPetroleum (30%), Melrose (40% - Operator) and Oil Search (30%) was awarded therights for the Mesaha block in the international bid round conducted by Egypt'sGANOPE. INVESTMENT PLAN Group investments during 2006 amounted to €145m (compared to €185m in 2005) andrelated mostly to small projects for the upgrading and maintenance of industrialsites and the development of our petrol stations networks in Greece and abroad. 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. FINANCIAL POSITION Group capital employed amounted to €3.442m at end-2006, up 16% over 2005, themain reasons being the high crude oil and product prices and increasedinventories. Group debt reached €1.044m (from €700m in 2005), with the gearingratio (D/D&E) remaining within projected operating levels at 31%. Given that themajority of loans are USD-denominated and the strengthening of the • versus the$ in 2006, FX gains boosted group results by €52m vs 2005. As part of debt restructuring, a new refinancing plan was developed so as tobring the total debt of the group under Hellenic Petroleum Finance plc,achieving better terms and improved liquidity management. Hellenic PetroleumFinance plc already generated full-year savings in financing costs in excess of€2m on its first transaction (€300m multi-currency loan). Additional savings areexpected from the $1.2bn refining deal agreed at the end of 2006. Key Financial Indicators for the Group are attached. HELLENIC PETROLEUM GROUP TWELVE MONTHS 2006 CONSOLIDATED KEY FINANCIAL RESULTS (Prepared in accordance with IFRS) • MILLION 2005 2006 % Reported basis figures Net Sales 6,653 8,122 22% EBITDA 671 502 -25% Earnings before Tax 495 358 -28% Net Income 334 260 -22% Earnings per Share (EPS) • 1.09 0.85 -22% "Clean" results, ie adjusted for inventory effects EBITDA 466 526 13% Net Income 191 277 45% Earnings per Share (EPS) • 0.62 0.91 45% Balance sheet items Capital Employed 2,956 3,442 16%- Net Debt 700 1,044 -- Debt Gearing (D/D+E) 25% 31% --- Complete IFRS financial statements are available at the website: www.hellenic-petroleum.gr Group Consolidated Balance Sheet as at 31 December 2006 As at 31 December 2006 31 December 2005ASSETSNon-current assetsProperty, plant and equipment 1,380,334 1,405,940Intangible assets 117,270 94,859Investments in affiliated companies 366,165 357,858Deferred income tax assets 10,293 42,255Available-for-sale financial assets 3,813 2,092Loans, advances and other receivables 58,674 36,078 1,936,549 1,939,082Current assetsInventories 1,206,683 1,169,098Trade and other receivables 1,049,763 891,859Cash and cash equivalents 170,490 193,630 2,426,936 2,254,587 Total assets 4,363,485 4,193,669 EQUITYShare capital 1,020,081 1,019,963Reserves 571,312 543,642Retained Earnings 693,517 590,933Capital and reserves attributable to Company Shareholders 2,284,910 2,154,538 Minority interest 112,700 101,924 Total equity 2,397,610 2,256,462 LIABILITIESNon- current liabilitiesBorrowings 322,695 539,573Deferred income tax liabilities 21,492 18,645Retirement benefit obligations 140,956 133,747Provisions and other long term liabilities 77,043 67,348 562,186 759,313Current liabilitiesTrade and other payables 494,963 640,823Current income tax liabilities 10,304 153,045Borrowings 895,661 356,360Dividends payable 2,761 27,666 1,403,689 1,177,894Total liabilities 1,965,875 1,937,207Total equity and liabilities 4,363,485 4,193,669 Group Consolidated Income Statement for the year ended 31 December 2006 For the year ended 31 December 2006 31 December 2005 Sales 8,121,490 6,653,078 Cost of sales (7,430,131) (5,790,818) Gross profit 691,359 862,260 Selling, distribution and administrative expenses (361,223) (355,823) Exploration and development expenses (17,097) (11,579) Other operating (expenses) / income - net 42,253 31,523 Operating profit 355,292 526,381 Finance costs -net (35,294) (11,778) Currency exchange gains /(losses) 27,159 (24,823) Share of operating profit of associates 10,848 4,317 Dividend income 471 731 Profit before income tax 358,476 494,828 Income tax expense (87,559) (153,944) Profit for the year 270,917 340,884 (Less) / Add Minority Interest (10,725) (6,662) Net Income attributable to Equity holders of the Company 260,192 334,222 Basic and diluted earnings per share (expressed in Euro 0.85 1.09per share) Parent Company Balance Sheet as at 31 December 2006 As at 31 December 2006 31 December 2005ASSETSNon-current assetsProperty, plant and equipment 646,130 657,028Intangible assets 22,288 26,602Investments in affiliated companies 692,054 685,070Deferred income tax assets - 27,606Available-for-sale financial assets 67 80Loans, advances and other receivables 3,772 79 1,364,311 1,396,465 Current assetsInventories 1,107,490 1,071,322Trade and other receivables 828,103 730,523Cash and cash equivalents 37,878 75,956 1,973,471 1,877,801 Total assets 3,337,782 3,274,266 EQUITYShare capital 1,020,081 1,019,963Reserves 559,387 543,642Retained Earnings 450,439 384,710Total equity 2,029,907 1,948,315 LIABILITIESNon- current liabilitiesBorrowings 295,335 335,187Deferred income tax liabilities 405 -Retirement benefit obligations 115,114 108,711Provisions and other long term liabilities 47,939 46,435 458,793 490,333Current liabilitiesTrade and other payables 419,810 555,835Current income tax liabilities - 135,247Borrowings 426,511 116,870Dividends payable 2,761 27,666 849,082 835,618Total liabilities 1,307,875 1,325,951Total equity and liabilities 3,337,782 3,274,266 Parent Company Income Statement for year ended 31 December 2006 For the year ended 31 December 2006 31 December 2005 Sales 7,549,893 6,293,075 Cost of sales (7,113,463) (5,656,252) Gross profit 436,430 636,823 Selling, distribution and administrative expenses (187,863) (167,392) Exploration and development expenses (17,097) (11,579) Other operating (expenses) / income - net 28,203 6,019 Impairment of investments - (2,000) Operating profit 259,673 461,871 Finance costs -net (18,378) (6,197) Currency exchange gains /(losses) 22,073 (16,118) Dividend income 18,164 15,404 Profit before income tax 281,532 454,960 Income tax expense (70,142) (132,387) Profit for the year 211,390 322,573 Basic and diluted earnings per share for profit attributable to 0.69 1.06the equity holders of the Company (expressed in Euro per share) This information is provided by RNS The company news service from the London Stock Exchange