REG - Hellenic Petroleum - 1st Quarter Results <Origin Href="QuoteRef">HEPr.AT</Origin>

HELLENiQ ENERGY Holdings SAAnnouncement

11/05/2016 16:00

RNS Number : 9762X
Hellenic Petroleum S.A.
11 May 2016
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 refineriescoupled 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 marketin 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
% 
P&L figures






Refining Sales Volumes ('000 )



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 andpresence 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

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