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

HELLENiQ ENERGY Holdings SAAnnouncement

17/05/2017 16:25

RNS Number : 4616F
Hellenic Petroleum S.A.
17 May 2017
PRESS RELEASE
17 May 2017
First quarter 2017 financial results
Reported Net Income at 124m, up by +287.5%; higher production and sales 
HELLENIC PETROLEUM Group announced strong financial results, according to IFRS, with 1Q17 Adjusted EBITDA at 229m (+35%) and Adjusted Net Income at 126m (+80%). Benchmark refining margins remained at high levels and operational performance was improved in all Group activities.
Improved refining operations led to higher production (+11%) and sales (+16%), with total turnover exceeding 4m MT. All sales channels recorded growth, with exports up by 18% at 2.2m MT and domestic market sales at 1.3m MT (+13%), reflecting strong heating gasoil demand and increased market shares. Crude supply optimisation alsohad a positive effect on financial results; the above led over-performance vs benchmark margins higher compared to previous quarters.
Petrochemicals reported their strongest quarterly operational profitability, despite weaker benchmark margins, while Marketing recorded higher volumes and contribution to Group results.
1Q17 Reported Net Income amounted to 124m, vs 32m in 1Q16 (+287.5%), as reduced oil prices volatility in the first months of 2017 had a limited impact on inventory valuation.
Recovery of crude oil prices
Implementation of OPEC's decision to reduce crude oil production led to higher prices for most of 1Q17, with Brent averaging $55/bbl for the quarter, up significantly vs 1Q16.
Macro developments and monetary policy in Eurozone and the US resulted to the further strengthening of the US dollar, with EUR/USD at 1.06, the lowest in the last 15 years.
The notable strength of fuel oil cracks was the key driver of Med benchmark refining margins, with diesel crack also higher, while other products were weaker. Med FCC benchmark margins averaged $5.9/bbl, the strongest since 2015, with Hydrocracking at $5.1/bbl vs $5.4/bbl last year.
Increased domestic market demand 
Domestic fuels demand was up by 3% in 1Q17, with total consumption at 1.8m MT, due to colder weather conditions. Heating gasoil market was increased by 11%, while transport fuels were lower by 2%. The marine & aviation market was also higher by 26%, driven by bunkering demand. 
Increased operational cash flows by 48%, lower interest expense and balance sheet improvement
The implementation of Group financial strategy in 2016, with the new bond issue and the tender offer, as well as the improvement of financial ratios and debt covenants, was the key lever for balance sheet improvement.
Steadily strong operating cash flows (Adjusted EBITDA - Capex) amounted to 211m, vs 143m in 1Q16, enabling better management of debt obligations and working capital. As a result, gross debt continued the decline reported in the last quarters, with a further reduction following the repayment of the outstanding 8% 2017 notes post 31st March. 1Q17 Net Debt was 1.8bn, flat vs 4Q16. Furthermore, finance costs in 1Q17 were 4% lower and are expected to further reduce during the course of the year. 
Key strategic developments
In E&P, the planned exploration works at Patraikos Gulf area continued, while the Lease Agreement for offshore block 2 (JV with Total - operator and Edison) is in final form and negotiations for offshore blocks 1 and 10 are in process. The Lease Agreements for onshore areas "Arta-Preveza" and NW Peloponisos" are expected to be signed in the next few weeks. HELLENIC PETROLEUM expects the singing of all agreements and ratification from the Greek Parliament in order to proceed immediately with the start of exploration works.
Regarding the 35% indirect participation (through DEPA) on DESFA share capital, the Group in cooperation with the HRADF, is reviewing alternatives for the value maximisation of its participation.
Key highlights and contribution for each of the main business units in 1Q17 were:
REFINING, SUPPLY & TRADING
- Refining, Supply & Trading 1Q17 Adjusted EBITDA at 190m (+39%).
- Production amounted to 3.8 million MT, on higher refining utilisation, with sales exceeding 4m MT and exports at 55% of total.
- White products' yield at 84%
PETROCHEMICALS
- Increased integration between Aspropyrgos propylene unit and Thessaloniki PP plants, as well as improved East Med products pricing, led Adjusted EBITDA at 28m, the strongest quarterly performance on record. 
MARKETING
- 1Q17 Marketing Adjusted EBITDA at 17m (+17%).
- Domestic Marketing volumes were significantly higher in all markets, leading Adjusted EBITDA at 3m, vs 1m in 1Q16. 
- International Marketing sustained its profitability, with Adjusted EBITDA at 10m.
ASSOCIATED COMPANIES
- DEPA Group contribution to consolidated Net Incomecame in at 27m, due to significant demand increase from gas-fired electricity generators and other market segments.
- Elpedison's EBITDA at 15m in 1Q17, on stronger demand, increased participation of gas-fired units in domestic energy mix, as well as tightness in the interconnected European market.
Key consolidated financial indicators (prepared in accordance with IFRS) for 1Q17 are shown below:
 million



1Q16
1Q17
% 
P&L figures






Refining Sales Volumes ('000 )



3,443
4,009
16%
Sales 



1,247
2,078
67%
EBITDA



129
226
+75%
Adjusted EBITDA 1



169
229
+35%
Net Income



32
124
-
Adjusted Net Income 1



70
126
80%
Balance Sheet Items






Capital Employed



4,321
4,039
-7%
Net Debt



2,504
1,783
-29%
Debt Gearing (ND/ND+E)



58%
44%
-
Notes:
1. Calculated as Reported adjusted for inventory effects and other non-operating items. 
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 2017
31 December 2016
ASSETS



Non-current assets



Property, plant and equipment
11
3.276.876
3.302.923
Intangible assets
12
107.770
108.294
Investments in associates and joint ventures

720.224
689.607
Deferred income tax assets

65.251
100.973
Available-for-sale financial assets

1.642
1.626
Loans, advances and long term assets

88.893
91.131


4.260.656
4.294.554
Current assets



Inventories
13
988.987
929.164
Trade and other receivables
14
863.762
868.331
Derivative financial instruments

1.923
15.192
Cash, cash equivalents and restricted cash
15
1.081.096
1.081.580


2.935.768
2.894.267
Total assets

7.196.424
7.188.821




EQUITY



Share capital
16
1.020.081
1.020.081
Reserves
17
459.444
469.788
Retained Earnings

673.712
549.891
Capital & reserves attributable to owners of the parent

2.153.237
2.039.760




Non-controlling interests

101.086
101.875




Total equity

2.254.323
2.141.635




LIABILITIES



Non-current liabilities



Borrowings
18
1.258.762
1.456.204
Deferred income tax liabilities

42.191
42.736
Retirement benefit obligations

113.015
110.912
Provisions for other liabilities and charges

9.785
9.306
Trade and other payables

216.414
259.644


1.640.167
1.878.802
Current liabilities



Trade and other payables
19
1.690.768
1.777.909
Current income tax liabilities

3.576
3.534
Borrowings
18
1.607.135
1.386.299
Dividends payable

455
642


3.301.934
3.168.384
Total liabilities

4.942.101
5.047.186
Total equity and liabilities

7.196.424
7.188.821


Group Consolidated statement of comprehensive income





For the three month period ended

Note
31 March 2017
31 March 2016








Sales

2.077.594
1.247.001




Cost of sales

(1.792.930)
(1.073.088)




Gross profit

284.664
173.913




Selling and distribution expenses

(66.234)
(69.401)
Administrative expenses

(29.894)
(27.164)
Exploration and development expenses

(129)
(2.072)
Other operating income / (expenses) - net
5
(7.332)
4.204
Operating profit 

181.075
79.480




Finance income
6
1.264
1.988
Finance expense
6
(47.651)
(50.418)
Currency exchange (losses) / gains 
7
(854)
11.455
Share of profit / (loss) of investments in associates and joint ventures
8
30.617
(718)
Profit before income tax 

164.451
41.787




Income tax expense
9
(40.627)
(10.192)
Profit for the period

123.824
31.595




Other comprehensive income:



Items that may be reclassified subsequently to profit or loss:



Revaluation of land and buildings

(1.669)
-
Changes in the fair value on available-for-sale financial assets

14
(4.930)
Fair value gains / (losses) on cash flow hedges 
17
(9.421)
(3.156)
Currency translation differences and other movements

(60)
(728)
Other comprehensive loss for the period, net of tax

(11.136)
(8.814)
Total comprehensive income for the period

112.688
22.781




Profit attributable to:



 Owners of the parent

123.821
32.406
 Non-controlling interests

3
(811)


123.824
31.595
Total comprehensive income attributable to:



 Owners of the parent

113.477
23.697
 Non-controlling interests

(789)
(916)


112.688
22.781
Basic and diluted earnings per share
(expressed in Euro per share)
10
0,41
0,11







Group Consolidated statement of cash flows


For the three month period ended

Note
31 March 2017
31 March 2016
Cash flows from operating activities



Cash generated from operations
20
40.600
(1.324.708)
Income tax paid

(1.559)
(1.777)
Net cash generated from / (used in) operating activities

39.041
(1.326.485)




Cash flows from investing activities



Purchase of property, plant and equipment & intangible assets

(18.022)
(25.718)
Proceeds from disposal of property, plant and equipment & intangible assets

255
142
Interest received

1.264
1.988
Net cash generated from / (used in) investing activities

(16.503)
(23.588)




Cash flows from financing activities



Interest paid

(41.477)
(43.664)
Dividends paid to shareholders of the Company

(187)
(473)
Movement in restricted cash

11.873
-
Proceeds from borrowings

45.502
21.923
Repayments of borrowings

(25.943)
(13.883)
Net cash generated from / (used in) financing activities

(10.232)
(36.097)




Net (decrease) / increase in cash and cash equivalents 

12.306
(1.386.170)




Cash and cash equivalents at the beginning of the period
15
924.055
1.952.808
Exchange gains / (losses) on cash and cash equivalents 

(917)
(2.370)
Net (decrease) / increase in cash and cash equivalents 

12.306
(1.386.170)
Cash and cash equivalents at end of the period
15
935.444
564.268



Parent Company Statement of Financial Position


As at

Note
31 March 2017
31 December 2016
ASSETS



Non-current assets



Property, plant and equipment
10
2.703.252
2.718.798
Intangible assets
11
7.238
6.490
Investments in subsidiaries, associates and joint ventures

655.265
655.265
Deferred income tax assets

1.274
38.839
Available-for-sale financial assets
3
1.019
1.017
Loans, advances and long-term assets

18.857
35.109


3.386.905
3.455.518




Current assets



Inventories
12
898.037
839.306
Trade and other receivables
13
1.012.179
1.036.420
Derivative financial instruments
3
1.923
15.192
Cash, cash equivalents and restricted cash
14
930.699
888.783


2.842.838
2.779.701
Total assets

6.229.743
6.235.219




EQUITY



Share capital
15
1.020.081
1.020.081
Reserves
16
460.333
469.754
Retained Earnings

196.282
100.315
Total equity

1.676.696
1.590.150




LIABILITIES



Non-current liabilities



Borrowings
17
1.262.180
1.460.281
Retirement benefit obligations

90.204
88.521
Provisions for other liabilities and charges

7.133
6.829
Trade and other payables

202.818
246.405


1.562.335
1.802.036
Current liabilities



Trade and other payables
18
1.651.232
1.691.973
Borrowings
17
1.339.025
1.150.418
Dividends payable

455
642


2.990.712
2.843.033
Total liabilities

4.553.047
4.645.069
Total equity and liabilities

6.229.743
6.235.219



Parent CompanyStatement of Cash flows


For the three-month period ended

Note
31 March 2017
31 March 2016
Cash flows from operating activities



Cash outflow from operations
19
95.323
(1.247.868)
Net cash outflow from operating activities

95.323
(1.247.868)




Cash flows from investing activities



Purchase of property, plant and equipment & intangible assets
10,11
(14.663)
(21.255)
Interest received
6
3.108
4.252
Participation in share capital increase of affiliated companies

-
(1.400)
Net cash outflow from investing activities

(11.555)
(18.403)




Cash flows from financing activities



Interest paid

(31.450)
(41.988)
Dividends paid

(187)
(473)
Movement in restricted cash

11.873
-
Proceeds from borrowings

34.000
16.000
Repayments of borrowings

(43.494)
(74.025)
Net cash outflow from financing activities

(29.258)
(100.486)




Net decrease in cash and cash equivalents

54.510
(1.366.757)




Cash and cash equivalents at the beginning of the period
14
731.258
1.683.600
Exchange gains / (losses) on cash and cash equivalents

(721)
(213)
Net decrease in cash and cash equivalents

54.510
(1.366.757)
Cash and cash equivalents at end of the period
14
785.047
316.630

This information is provided by RNS
The company news service from the London Stock Exchange
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