REG - Hellenic Petroleum - 1st Quarter Results

HELLENiQ ENERGY Holdings SAAnnouncement

16/05/2019 15:50

RNS Number : 3169Z
Hellenic Petroleum S.A.
16 May 2019
 


PRESS RELEASE
16 May 2018




First quarter 2019 financial results




 
 
Satisfactory performance sustained, despite weaker benchmark refining margins; Higher volumes in the Greek market   
 
HELLENIC PETROLEUM Group 1Q19 Adjusted EBITDA came in at €123m, with Adjusted Net Income at €37m, recording one more quarter of good results and in line with expected industry performance. The drop in benchmark refining margins, mainly on account of the lowest gasoline and naphtha cracks during the last four years and reduced crude availability in the region, as well as maintenance driven production, decrease at 3.6m MT (-9%), led to a negative impact on quarterly operational profitability vs 1Q18.
A mitigating factor to the weak refining environment and crude supply issues has been the flexibility of Group's refineries in processing varied crude grades allowing a sustained over-performance as well as a stronger USD exchange rate. On a comparable basis, non-refining business units' performance at similar levels as 1Q18, contributing by 37% to Group Adj. EBITDA.
With respect to financing costs, a further drop of 16% reflects debt reduction as well as better pricing on account of renegotiation of existing debt facilities. Equity consolidated Power & Gas contribution to Net Income is up (+30%), despite DESFA sale and deconsolidation.
Based on the results above and the positive impact of increasing crude oil prices during the quarter, 1Q19 Reported Net Income amounted to €47m, with results including for the first time the impact of new IFRS 16 on operating leases of retail fuel stations and other equipment.
 
Benchmark refining margins significantly weaker in 1Q19
During 1Q19, crude oil prices moved higher from the 2018 year-end lows of $50/bbl, reaching $70/bbl at the end of the quarter, mainly due to geopolitical developments and OPEC's decision to reduce crude supply. The lower availability of sour crude grades in the Med led to their prices exceeding those of Brent for the first time since 2013, with negative impact on benchmark margin calculation. This, combined with particularly weak light ends cracks, resulted to complex Med benchmark margins at their lower levels for at least 4 years. Med FCC benchmark margins were 29% lower, averaging $3.4/bbl, with Hydrocracking at $3.7/bbl (-31%).
EUR/USD was flat vs 4Q18, at 1.14, with the USD stronger vs 1Q18.
 
 
Increased heating gasoil and bunkering fuels demand
Domestic market fuels demand came in at 1.8m MT (+5%), as heating gasoil consumption was higher (+21%), due to weather conditions, while auto-fuels demand dropped marginally. Aviation and especially bunkering fuels demand recorded another increase (+15%), at 831k MT, mainly on account of increased international marine offtake.
 
Further balance sheet improvement and financing expenses drop
A reduction of financing expenses was reported for one more quarter and is expected to continue in coming quarters, following the recent renegotiation of existing bank facilities, as well as the repayment of the €325m Eurobond, which matures on 4 July 2019, out of cash reserves.
Overall, Group balance sheet remains strong, with Net debt at €1.5bln, flat q-o-q and debt gearing at 38%, significantly improved vs 1Q18.
The implementation of the new IFRS 16 affected the accounting of operating leases, with a positive EBITDA impact of €9m in 1Q19, mainly in Domestic Marketing, while financial liabilities (mostly retail stations leases) increased by c.€175m.
                      
Key strategic developments
In E&P, on 9 April 2019 the Lease Agreements for Block 10 (HELPE 100%) and Block Ionian (Repsol 50% - operator, HELPE 50%) were signed, while during 1Q19 the scheduled environmental and exploration studies in other W. Greece concessions continued.
  
Key highlights and contribution for each of the main business units in 1Q19 were:
 
REFINING, SUPPLY & TRADING
-  Refining, Supply & Trading 1Q19 Adjusted EBITDA at €80m (-29%), on account of weaker benchmark margins.
-  White products' yield remained at 85%, despite the negative impact of maintenance shut-downs.
-  Exports were affected by lower refinery utilisation, leading to total 1Q19 sales of 3.6m MT (-13%).
 
PETROCHEMICALS
-  Higher sales volumes partly offset weaker PP margins, with 1Q19 Adjusted EBITDA at €25m (-4%).
 
MARKETING
-  1Q19 Marketing Adjusted EBITDA at €20m (+46%), following IFRS 16 implementation, while comparable performance was at a similar level to last year.
-  In Domestic Marketing, sales volumes were up 5%, on increased heating gasoil demand, with 1Q19 EBITDA at €9m.
-  International Marketing volumes increased by 8%, with EBITDA at €11m (+4%), while construction works for the new fuels terminal in Cyprus commenced.
 
ASSOCIATED COMPANIES
-  1Q19 DEPA Group contribution to consolidated Net Income amounted to €17m. This is up from last year as a result of a combinations of factors, including the different Group structure, with DESFA no longer included, while ownership and consolidation method for regional gas retail and distribution companies has changed.
-  The application of flexibility compensation mechanism independent power generators, as well as increased production, led Elpedison's EBITDA at €11m in 1Q18, notably higher vs 1Q18.
 
HELLENIC PETROLEUM Group of Companies
Key consolidated financial indicators (prepared in accordance with IFRS) for 1Q19 are shown below:




€ million


 


 


 


1Q18


1Q19


% Δ




P&L figures


 


 


 


 


 


 




Refining Sales Volumes ('000 ΜΤ)


 


 


 


4,102


3,551


-13%




Sales


 


 


 


2,168


1,991


-8%




EBITDA


 


 


 


166


135


-18%




Adjusted EBITDA 1


 


 


 


149


123


-18%




Net Income


 


 


 


74


47


-37%




Adjusted Net Income 1


 


 


 


62


37


-40%




Balance Sheet Items


 


 


 


 


 


 




Capital Employed


 


 


 


4,419


3,971


-10%




Net Debt


 


 


 


1,973


1,522


-23%




Debt Gearing (ND/ND+E)


 


 


 


45%


38%


-




 
Notes:
1. Calculated as Reported adjusted for inventory effects and other non-operating items. 1Q19 results includes IFRS16 impact.
 
 
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 2019


31 December 2018




ASSETS


 


 


 




Non-current assets


 


 


 




Property, plant and equipment


10


3.245.594


3.268.928




Right of use assets


2,11


215.259


-




Intangible assets


12


105.365


105.617




Investments in associates and joint ventures


 


407.982


390.091




Deferred income tax assets


 


62.629


64.109




Investment in equity instruments


3


842


634




Loans, advances and long term assets


2


42.163


73.922




 


 


4.079.834


3.903.301




Current assets


 


 


 




Inventories


13


1.127.235


993.031




Trade and other receivables


2,14


807.613


821.598




Assets held for sale


 


3.493


3.133




Derivative financial instruments


3


-


-




Cash, cash equivalents and restricted cash


15


1.223.449


1.276.366




 


 


3.161.790


3.094.128




Total assets


 


7.241.624


6.997.429




 


 


 


 




EQUITY


 


 


 




Share capital and share premium


16


1.020.081


1.020.081




Reserves


17


266.455


258.527




Retained Earnings


 


1.099.279


1.052.164




Equity attributable to equity holders of  the parent


 


2.385.815


2.330.772




Non-controlling  interests


 


63.445


63.959




Total equity


 


2.449.260


2.394.731




 


 


 


 




LIABILITIES


 


 


 




Non-current liabilities


 


 


 




Interest bearing loans & borrowings


18


1.629.332


1.627.171




Lease liabilities


2


149.496


-




Deferred income tax liabilities


 


192.098


185.744




Retirement benefit obligations


 


165.708


163.514




Provisions


 


42.293


42.038




Trade and other payables


 


28.873


28.852




 


 


2.207.800


2.047.319




Current liabilities


 


 


 




Trade and other payables


19


1.346.411


1.349.153




Derivative financial instruments


 


5.626


16.387




Income tax payable


 


90.387


80.171




Interest bearing loans & borrowings


18


1.116.532


1.108.785




Lease liabilities


2


24.732


-




Dividends payable


 


876


883




 


 


2.584.564


2.555.379




Total liabilities


 


4.792.364


4.602.698




Total equity and liabilities


 


7.241.624


6.997.429




Group Consolidated statement of comprehensive income
 




 


 


For the three month period ended




 


Note


31 March 2019


31 March 2018




Revenue from contracts with customers


4


1.991.216


2.168.386




Cost of sales


 


(1.804.901)


(1.944.687)




Gross profit


 


186.315


223.699




Selling and distribution expenses


 


(75.548)


(74.475)




Administrative expenses


 


(33.963)


(32.129)




Exploration and development expenses


 


(450)


(126)




Other operating income/(expenses) and other gains/(losses)-net


5


2.916


2.023




Operating profit


 


79.270


118.992




Finance income


 


1.000


975




Finance expense


 


(33.296)


(39.508)




Lease finance cost


 


(2.273)


-




Currency exchange gain/(loss)


6


1.255


(2.118)




Share of profit of investments in associates and joint ventures


7


18.091


13.895




Profit  before income tax


 


64.047


92.236




Income tax expense


8


(17.433)


(18.015)




Profit for the period


 


46.614


74.221




Profit attributable to:


 


 


 




     Owners of the parent


 


47.115


74.272




     Non-controlling interests


 


(501)


(51)




 


 


46.614


74.221




Other comprehensive income:


 


 


 




Other comprehensive income that will not be reclassified to profit or loss (net of tax):


 


 


 




Changes in the fair value of equity instruments


17


(4)


(147)




Other comprehensive income that may be reclassified subsequently to profit or loss (net of tax):


 


 


 




Fair value gains on cash flow hedges


17


7.889


1.884




Currency translation differences and other movements


17


30


(124)




Other comprehensive income  for the period, net of tax


 


7.915


1.613




Total comprehensive income for the period


 


54.529


75.834




Total comprehensive income/(loss) attributable to:


 


 


 




     Owners of the parent


 


55.043


75.889




     Non-controlling interests


 


(514)


(55)




 


 


54.529


75.834




Basic and diluted earnings per share

(expressed in Euro per share)


9


0,15


0,24




 
 
Group Consolidated statement of cash flows
 




 


 


For the three month period ended




 


Note


31 March 2019


31 March 2018




Cash flows from operating activities


 


 


 




Cash generated (used in)/ from operations


20 


4.514


(98.029)




Income tax received/(paid)


 


(2.660)


4.492




Net cash generated from / (used in) operating activities


 


1.854


(93.537)




 


 


 


 




Cash flows from investing activities


 


 


 




Purchase of property, plant and equipment & intangible assets


10,1


(31.360)


(25.452)




Proceeds from disposal of property, plant and equipment & intangible assets


 


245


20




Participation in share capital (increase)/ decrease of associates


 


200


-




Purchase of subsidiary, net of cash acquired


 


-


(16.000)




Settlement of consideration of acquisition of further equity interest in subsidiary


-


(1.298)




Grants received


 


-


80




Interest received


 


1.000


975




Prepayments for right-of-use assets


 


(259)


-




Proceeds from disposal of investments in equity instruments


 


-


257




Net cash used in investing activities


 


(30.174)


(41.418)




 


 


 


 




Cash flows from financing activities


 


 


 




Interest paid


 


(26.215)


(32.663)




Dividends paid to shareholders of the Company


 


-


(3)




Movement in restricted cash


15 


-


144.445




Acquisition of treasury shares


17 


-


(249)




Proceeds from borrowings


 


7.722


-




Repayments of borrowings


 


148


(165.734)




Payment of lease liabilities


 


(10.854)


-




Net cash used in financing activities


 


(29.199)


(54.204)




 


 


 


 




Net decrease in cash and cash equivalents


 


(57.519)


(189.159)




 


 


 


 




Cash and cash equivalents at the beginning of the period


15


1.275.159


873.261




Exchange gain/(loss) on cash and cash equivalents


 


4.602


(2.514)




Net decrease in cash and cash equivalents


 


(57.519)


(189.159)




Cash and cash equivalents at end of the period


15


1.222.242


681.588




 
 
 
 
Parent Company Statement of Financial Position
 




 


 


As at




 


Note


31 March 2019


31 December 2018




ASSETS


 


 


 




Non-current assets


 


 


 




Property, plant and equipment


9


2.673.521


2.684.237




Right of use assets


2,10


24.311


-




Intangible assets


11


5.427


4.799




Investments in subsidiaries, associates and joint ventures


 


1.032.372


1.032.372




Investment in equity instruments


3


513


318




Loans, advances and long-term assets


 


8.625


8.887




 


 


3.744.769


3.730.613




 


 


 


 




Current assets


 


 


 




Inventories


12


1.023.867


893.859




Trade and other receivables


13


659.114


680.347




Cash, cash equivalents and restricted cash


14


1.039.379


1.071.585




 


 


2.722.360


2.645.791




Total assets


 


6.467.129


6.376.404




 


 


 


 




EQUITY


 


 


 




Share capital and share premium


15


1.020.081


1.020.081




Reserves


16


270.135


262.263




Retained Earnings


 


900.388


864.333




Total equity


 


2.190.604


2.146.677




 


 


 


 




LIABILITIES


 


 


 




Non-current liabilities


 


 


 




Interest bearing loans and borrowings


17


1.661.904


1.657.598




Lease liabilities


2


18.014


-




Deferred income tax liabilities


 


158.701


151.873




Retirement benefit obligations


 


134.422


132.539




Provisions


 


37.725


37.858




Trade and other payables


 


14.654


14.810




 


 


2.025.420


1.994.678




Current liabilities


 


 


 




Trade and other payables


18


1.232.400


1.226.107




Derivative financial instruments


3


5.626


16.387




Income tax payable


 


86.148


76.322




Interest bearing loans and borrowings


17


919.791


915.350




Lease liabilities


2


6.263


-




Dividends payable


 


877


883




 


 


2.251.105


2.235.049




Total liabilities


 


4.276.525


4.229.727




Total equity and liabilities


 


6.467.129


6.376.404




 
 
 
 
Parent Company Statement of Comprehensive Income
 




 


 


For the three-month period ended




 


Note


31 March 2019


31 March 2018




Revenue from contracts with customers


4


1.824.373


2.010.635




Cost of sales


 


(1.703.824)


(1.855.792)




Gross profit


 


120.549


154.843




 


 


 


 




Selling and distribution expenses


 


(24.294)


(22.238)




Administrative expenses


 


(21.043)


(19.557)




Exploration and development expenses


 


(29)


(21)




Other operating income/(expenses) & other gains/(losses)-net


5


2.851


619




Operating profit


 


78.034


113.646




Finance income


 


2.388


2.487




Finance expense


 


(30.567)


(36.419)




Lease finance cost


 


(219)


-




Currency exchange gains/(losses)


6


1.563


(2.501)




Profit before income tax


 


51.199


77.213




Income tax expense


7


(15.144)


(17.398)




Profit for the period


 


36.055


59.815




Other comprehensive income/(loss):


 


 


 




Other comprehensive income/(loss), that will not be reclassified to profit or loss (net of tax):


 


 


 




Changes in the fair value of equity instruments


16


(17)


(123)




 


 


(17)


(123)




Other comprehensive income/(loss), that may be reclassified subsequently to profit or loss (net of tax):


 


 


 




Fair value gains / (losses) on cash flow hedges


16


7.889


1.884




 


 


7.889


1.884




 


 


 


 




Other Comprehensive income/(loss) for the period, net of tax


 


7.872


1.761




Total comprehensive income for the period


 


43.927


61.576




Basic and diluted earnings per share

(expressed in Euro per share)


8


0,12


0,20




 
Parent Company Statement of Cash flows
 




 


 


For the three-month period ended




 


Note


31 March 2019


31 March 2018




Cash flows from operating activities


 


 


 




Cash generated from/(used in) operations


19


9.177


(81.202)




Income tax (paid)/received


 


(1.768)


5.768




Net cash generated from/(used in) operations


 


7.409


(75.434)




 


 


 


 




Cash flows from investing activities


 


 


 




Purchase of property, plant and equipment & intangible assets


9,11


(25.851)


(17.401)




Proceeds from disposal of property, plant and equipment & intangible assets


 


4


-




Interest received


 


2.388


2.487




Settlement of consideration of acquisition of further equity interest in subsidiary


 


-


(16.000)




Participation in share capital increase of subsidiaries & associates


 


-


(850)




Net cash used in investing activities


 


(23.459)


(31.764)




 


 


 


 




Cash flows from financing activities


 


 


 




Interest paid


 


(23.295)


(29.957)




Dividends paid


 


(7)


(3)




Movement in restricted cash


 


-


144.445




Acquisition of treasury stock


 


-


(249)




Proceeds from borrowings


 


4.442


7.700




Repayments of borrowings


 


-


(161.567)




Payment of lease liabilities


 


(1.854)


-




Net cash generated from / (used in) financing activities


 


(20.714)


(39.631)




 


 


 


 




Net decrease in cash and cash equivalents


 


(36.764)


(146.829)




 


 


 


 




Cash and cash equivalents at the beginning of the period


14


1.070.377


667.599




Exchange losses on cash and cash equivalents


 


4.559


(2.501)




Net decrease in cash and cash equivalents


 


(36.764)


(146.829)




Cash and cash equivalents at end of the period


14


1.038.172


518.269




 




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