REG - Hellenic Petroleum - 3rd Quarter Results

HELLENiQ ENERGY Holdings SAAnnouncement

08/11/2018 15:35

RNS Number : 8254G
Hellenic Petroleum S.A.
08 November 2018
 


PRESS RELEASE
8 November 2018
 




Third Quarter / Nine month 2018 financial results




 




 
Record high 9M18 reported Net Income (+32%) and exports; stronger profitability, increased production and sales in 3Q18.




 
HELLENIC PETROLEUM Group announced its 3Q and 9M financial results. 3Q17 Reported EBITDA came in at €258 m (+12%), leading 9M to a record high of €731 m (+20%). IFRS Reported Net Income amounted to €135 m (+28%) in Q3 and €360 m (+32%) in 9M, the highest on record, with Earnings per Share (EPS) at 1.18.
Higher sales volumes and crude prices led 9M18 sales revenues at €7.3 bn (+ 25%).
Likewise, excluding the impact of increasing crude oil prices on inventory and one-off items, 3Q18 Adjusted EBITDA reached €237m, (+15%), while 9M18 came in at €574 m, with Adjusted Net Income at €111m (+25%) in 3Q18 and €239m in 9M18 (-23%).  
The main driver for improved 3Q18 operating profitability was strong refining performance which, through increased mechanical availability, normalised operations and optimal crude selection, delivered the highest ever overperformance vs benchmark refining margins of $7.3/bbl. Equally, the significant increase in production vs 3Q17 (4m MT, +19%), led total sales higher by 8% and exports by 27%. Operating performance outweighed the significant decline in benchmark refining margins by 20%, as well as the cost of increased CO2 emissions rights provisions. Regarding feedstock supply, following the re-imposition of US sanctions, the Group substituted Iranian crude with alternative crude oil types, a switch that did not affect performance adversely.
As a result, 9M18 production rose to 11.7 m tons (+ 5%) and sales volumes to 12.4 m tons (+ 3%) with exports at 7.1 m tons, accounting for 57% of total sales.
The Group's financial position strengthened further, with finance cost 13% lower in 9M18 and 11% in 3Q18, following the successful completion of the 2018 refinancing program.
3Q18 operating cashflow (Adj. EBITDA - Capex) amounted to €203 m, the highest since 1Q17, bringing Net Debt at €1.8bn, lower q-o-q and gearing at 40%, the lowest level in the last 2.5 years.
Based on 9M18 reported results, the Board of Directors approved the distribution of €0.25/share as interim dividend for 2018.
 
 
High and volatile crude oil prices, strong USD sustained
US sanctions on Iran, combined with increased production in North America, led 3Q18 crude oil prices averaging $76/bbl, flat vs 2Q18, but significantly higher compared to 3Q17 (+46%). Prices were volatile, recording their highest level since 2014, at the end of 3Q18.
Macro and political developments in Eurozone and the US resulted in a further strengthening of USD against the euro q-o-q, averaging $1.16, flat vs 3Q17 ($1.17).
Product cracks, excluding diesel, were weaker compared to 3Q17, leading the Med benchmark refining margins 20% lower, with FCC benchmark at $5.7/bbl vs $7.1/bbl last year, while decline was lower for Hydrocracking margins, which averaged $5.6/bbl (3Q 2017 $5.9/bbl).
 
Increased aviation fuels demand
Total domestic fuels demand was 1.6 m tones, - 1% vs 3Q17. The marine and aviation market recorded an increase of 3%, with a significant improvement in aviation fuels market (+ 10%), due to tourism.
 
Important developments
In E&P, the lease agreements for "Block 10 - Kyparissiakos Gulf" (HELPE 100%) and two offshore areas west and southwest of Crete, (HELPE 20%, Total 40% - operator, ExxonMobil 40%) were finalized, pending formal signing and customary approvals.
With regards to DESFA sale, the spin-off of DESFA from DEPA through an in kind share capital reduction of DEPA, in exchange for DESFA shares to owners HRADF and HELPE is in process, while the certification of DESFA from energy regulatory authorities is pending. The transaction is expected to be completed in the next quarter. The proceeds of the sale, net of applicable taxes, will be applied mostly towards repaying existing debt, while an extraordinary dividend may also be considered.
In the context of DEPA Group's reorganization of distribution and marketing activities, the acquisition of remaining 49% of EPA and EDA Attikis from Attiki Gas (subsidiary of Shell Gas BV) is expecting approvals from competition authorities.
Key highlights and contribution for each of the main business units in 3Q18 were:
 
REFINING, SUPPLY & TRADING
-  Refining, Supply & Trading 3Q18 Adjusted EBITDA at €173m (+25%), with 9M18 at €423 m (-17%).
-  The improved operation of the refineries in 3Q18 led to an increase in production and sales to 4 m tons (+19%) and 4.1 m tons (+8%) respectively.
-  HELPE 3Q18 realised margin amounted to $12.1/bbl, mainly on taking advantage of opportunities in crude pricing structure.
-  Crude slate differentiation had an impact on product yields as well, with middle distillates at 52%, while fuel oil was reduced at 10%.
 
PETROCHEMICALS
-  Higher sales volumes of polypropylene (+5%) and increased contribution of the Aspropyrgos refinery propylene unit led to increased profitability, with Adjusted EBITDA at €25 m (+5%).
 
MARKETING
-  3Q18 Marketing Adjusted EBITDA at €42 m and 9M18 at €81 m.
-  Increased aviation fuels volumes maintained 3Q18 profitability at similar levels vs 3Q17, with Domestic Marketing Adjusted EBITDA at €26 m (-3%).
-  Weaker margins in most markets where the Group operates, had a negative impact on International Marketing profitability, with 3Q18 Adjusted EBITDA at €16 m (-14%).
 
ASSOCIATED COMPANIES
-  DEPA Group participation to consolidated Net Income came in at €7m.
-  Elpedison EBITDA amounted to €4 m (+82%), due to improved Retail contribution.
 
 
 
Key consolidated financial indicators (prepared in accordance with IFRS) for 3Q18 are shown below:




€ million


3Q17


3Q18


% Δ


9M17


9M18


% Δ




P&L figures


 


 


 


 


 


 




Refining Sales Volumes ('000 ΜΤ)


3,787


4,087


8%


11,991


12,354


3%




Sales


1,823


2,674


47%


5,888


7,341


25%




EBITDA


230


258


12%


608


731


20%




Adjusted EBITDA 1


206


237


15%


663


574


-14%




Net Income


106


135


28%


273


360


32%




Adjusted Net Income 1


89


111


25%


313


239


-23%




Balance Sheet Items


 


 


 


 


 


 




Capital Employed


 


 


 


4,142


4,421


7%




Net Debt


 


 


 


1,811


1,773


-2%




Debt Gearing (ND/ND+E)


 


 


 


44%


40%


 




 
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


30 September 2018


31 December 2017




ASSETS


 


 


 




Non-current assets


 


 


 




Property, plant and equipment


10


3.261.709


3.311.893




Intangible assets


11


106.354


105.684




Investments in associates and joint ventures


 


704.346


701.635




Deferred income tax assets


 


67.260


71.355




Investment in equity instruments


2,3


839


1.857




Loans, advances and long term assets


 


84.380


89.626




 


 


4.224.888


4.282.050




Current assets


 


 


 




Inventories


12


1.211.620


1.056.393




Trade and other receivables


2,13


938.400


791.205




Assets held for sale


10


3.600


-




Derivative financial instruments


3


21.925


11.514




Cash, cash equivalents and restricted cash


14


1.053.450


1.018.913




 


 


3.228.995


2.878.025




 


 


 


 




 


 


 


 




Total assets


 


7.453.883


7.160.075




 


 


 


 




EQUITY


 


 


 




Share capital and share premium


15


1.020.081


1.020.081




Reserves


16


268.407


358.056




Retained Earnings


 


1.294.875


930.522




Capital and reserves attributable to owners of  the parent


 


2.583.363


2.308.659




Non-controlling  interests


 


63.864


62.915




Total equity


 


2.647.227


2.371.574




 


 


 


 




LIABILITIES


 


 


 




Non-current liabilities


 


 


 




Borrowings


17


1.424.034


920.234




Deferred income tax liabilities


 


169.592


131.611




Retirement benefit obligations


 


149.404


133.256




Provisions for other liabilities and charges


 


4.344


6.371




Trade and other payables


 


26.446


28.700




 


 


1.773.820


1.220.172




Current liabilities


 


 


 




Trade and other payables


18


1.523.280


1.661.457




Income tax payable


 


105.539


5.883




Borrowings


17


1.403.323


1.900.269




Dividends payable


 


694


720




 


 


3.032.836


3.568.329




Total liabilities


 


4.806.656


4.788.501




Total equity and liabilities


 


7.453.883


7.160.075




 
 
 
Group Consolidated statement of comprehensive income
 




 


 


For the 9 month period ended


For the 3 month period ended




 


Note


30 September 2018


30 September 2017


30 September 2018


30 September 2017




Sales


4


7.341.129


5.888.487


2.674.220


1.822.785




Cost of sales


 


(6.420.913)


(5.109.442)


(2.349.606)


(1.546.631)




Gross profit


 


920.216


779.045


324.614


276.154




Selling and distribution expenses


 


(234.407)


(198.401)


(79.945)


(64.914)




Administrative expenses


 


(104.294)


(93.852)


(37.899)


(30.807)




Exploration and development expenses


 


(660)


(249)


(631)


(40)




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


5


7.176


(17.540)


2.529


(2.842)




Operating profit


 


588.031


469.003


208.668


177.551




Finance income


 


2.783


3.020


1.034


582




Finance expense


 


(114.569)


(131.413)


(36.804)


(40.875)




Currency exchange gains/ (losses)


6


2.540


(8.317)


(1.988)


(1.468)




Share of profit of investments in associates and joint ventures


7


28.484


34.956


13.402


4.297




Profit  before income tax


 


507.269


367.249


184.312


140.087




Income tax expense


8


(147.341)


(94.043)


(49.556)


(34.525)




Profit for the period


 


359.928


273.206


134.756


105.562




Other comprehensive income/ (loss) :


 


 


 


 


 




Items that will not be reclassified to profit or loss:


 


 


 


 


 




Actuarial losses on defined benefit pension plans


16


(7.579)


(2.219)


(7.579)


-




Changes in the fair value of equity instruments


2, 16


(524)


849


(82)


(1.276)




Reduction in value of land


 


-


(1.669)


-


-




 


 


(8.103)


(3.039)


(7.661)


(1.276)




Items that may be reclassified subsequently to profit or loss:


 


 


 


 


 




Derecognition of (losses) / gains on hedges through comprehensive income


16


(14.920)


1.979


-


-




Fair value gains /(losses) on cash flow hedges


16


21.537


(13.014)


5.281


8.416




Currency translation differences and other movements


16


(481)


577


(355)


412




 


 


6.136


(10.458)


4.926


8.828




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


 


(1.967)


(13.497)


(2.735)


7.552




Total comprehensive income for the period


 


357.961


259.709


132.021


113.114




Profit attributable to:


 


 


 


 


 




     Owners of the parent


 


356.936


270.905


133.325


103.454




     Non-controlling interests


 


2.992


2.301


1.431


2.108




 


 


359.928


273.206


134.756


105.562




Total comprehensive income attributable to:


 


 


 


 


 




     Owners of the parent


 


354.967


258.101


130.650


110.885




     Non-controlling interests


 


2.994


1.608


1.371


2.229




 


 


357.961


259.709


132.021


113.114




Basic and diluted earnings per share

(expressed in Euro per share)


9


1,17


0,89


0,44


0,34




 
Group Consolidated statement of cash flows
 




 


 


For the 9 month period ended




 


Note


30 September 2018


30 September 2017




Cash flows from operating activities


 


 


 




Cash generated from operations


19


296.902


284.711




Income tax received/(paid)


 


(2.571)


(5.626)




Net cash generated from operating activities


 


294.331


279.085




 


 


 


 




Cash flows from investing activities


 


 


 




Purchase of property, plant and equipment & intangible assets


10,11


(94.985)


(137.539)




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


 


227


401




Settlement of consideration of acquisition of further equity interest in subsidiary


24


(16.000)


-




Purchase of subsidiary, net of cash acquired


24


(1.298)


-




Grants received


 


80


-




Interest received


 


2.783


3.020




Dividends received


 


24.023


19.346




Investments in associates  - net


 


-


(147)




Proceeds from disposal of investments in equity instruments


 


263


-




Net cash used in investing activities


 


(84.907)


(114.919)




 


 


 


 




Cash flows from financing activities


 


 


 




Interest paid


 


(99.981)


(126.677)




Dividends paid to shareholders of the Company


 


(74.479)


(59.578)




Dividends paid to non-controlling interests


 


(2.061)


(2.561)




Movement in restricted cash


14 


144.445


11.873




Acquisition of treasury shares


16 


(560)


(10.245)




Participation of minority shareholders in share capital increase of subsidiary


 


17


76




Proceeds from borrowings


 


408.089


285.800




Repayments of borrowings


 


(409.726)


(473.400)




Net cash generated from/ (used in) financing activities


 


(34.256)


(374.712)




 


 


 


 




Net increase/(decrease) in cash and cash equivalents


 


175.168


(210.546)




 


 


 


 




Cash and cash equivalents at the beginning of the period


14


873.261


924.055




Exchange gains/(losses) on cash and cash equivalents


 


3.813


(9.464)




Net increase/(decrease) in cash and cash equivalents


 


175.168


(210.546)




Cash and cash equivalents at end of the period


14


1.052.242


704.045




 
Parent Company Statement of Financial Position
 




 


 


As at




 


Note


30 September 2018


31 December 2017




ASSETS


 


 


 




Non-current assets


 


 


 




Property, plant and equipment


9


2.679.748


2.719.172




Intangible assets


10


6.447


7.042




Investments in subsidiaries, associates and joint ventures


 


689.372


671.622




Investment in equity instruments


3


460


1.252




Loans, advances and long-term assets


 


21.635


19.686




 


 


3.397.662


3.418.774




 


 


 


 




Current assets


 


 


 




Inventories


11


1.108.231


963.746




Trade and other receivables


12


1.087.558


989.901




Derivative financial instruments


3


21.925


11.514




Cash, cash equivalents and restricted cash


13


878.900


813.251




 


 


3.096.614


2.778.412




Total assets


 


6.494.276


6.197.186




 


 


 


 




EQUITY


 


 


 




Share capital


14


1.020.081


1.020.081




Reserves


15


272.785


360.694




Retained Earnings


 


771.059


428.448




Total equity


 


2.063.925


1.809.223




 


 


 


 




LIABILITIES


 


 


 




Non-current liabilities


 


 


 




Borrowings


16


1.454.547


909.579




Deferred income tax liabilities


 


131.262


89.959




Retirement benefit obligations


 


117.257


104.331




Derivative financial instruments


 


-


-




Provisions for other liabilities and charges


 


2.291


6.058




Trade and other payables


 


14.897


15.569




 


 


1.720.254


1.125.496




Current liabilities


 


 


 




Trade and other payables


17


1.413.156


1.554.027




Current income tax liabilities


 


100.878


2.769




Borrowings


16


1.195.369


1.704.951




Dividends payable


 


694


720




 


 


2.710.097


3.262.467




Total liabilities


 


4.430.351


4.387.963




Total equity and liabilities


 


6.494.276


6.197.186




 
 
 
Parent Company Statement of Comprehensive Income
 




 


 


For the 9 month period ended


For the 3 month period ended




 


Note


30 September 2018


30 September 2017


30 September 2018


30 September 2017




 


 


 


 


 


 




Sales


4


6.734.332


5.322.795


2.411.682


1.598.741




Cost of sales


 


(6.068.484)


(4.795.134)


(2.191.231)


(1.425.204)




Gross profit


 


665.848


527.661


220.451


173.537




Selling and distribution expenses


 


(71.742)


(44.123)


(23.610)


(12.352)




Administrative expenses


 


(64.675)


(56.249)


(24.533)


(19.101)




Exploration and development expenses


 


(834)


(95)


(672)


(29)




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


5


3.963


(24.571)


2.919


(3.502)




Operating profit


 


532.560


402.623


174.555


138.553




Finance income


 


7.026


9.278


2.412


2.983




Finance expense


 


(105.089)


(118.303)


(33.505)


(36.742)




Dividend income


 


35.083


33.724


-


-




Currency exchange losses


6


2.721


(8.625)


(1.522)


(1.601)




Profit before income tax


 


472.301


318.697


141.940


103.193




Income tax expense


7


(139.575)


(83.559)


(42.941)


(29.156)




Profit for the period


 


332.726


235.138


98.999


74.037




Other comprehensive income / (loss):


 


 


 


 


 




Items that will not be reclassified to profit or loss:


 


 


 


 


 




Acruarial losses on defined benefit pension plans


15


(6.200)


(1.775)


(6.200)


-




Changes in the fair value of equity instruments


15


(565)


804


(97)


(1.325)




 


 


(6.765)


(971)


(6.297)


(1.325)




Items that may be reclassified subsequently to profit or loss:


 


 


 


 


 




Fair value gains / (losses) on cash flow hedges


15


(8.303)


(13.014)


(24.559)


8.416




Derecognition of gains/(losses) on hedges through comprehensive income


15


14.920


1.979


29.840


-




 


 


6.617


(11.035)


5.281


8.416




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


 


(148)


(12.006)


(1.016)


7.091




Total comprehensive income for the period


 


332.578


223.132


97.983


81.128




Basic and diluted earnings per share

(expressed in Euro per share)


8


1,09


0,77


0,32


0,24




 
 
 
Parent Company Statement of Cash flows
 




 


 


For the 9 month period ended




 


Note


30 September 2018


30 September 2017




Cash flows from operating activities


 


 


 




Cash generated from operations


18


258.838


219.205




Income tax received / (paid)


 


2.224


(20)




Net cash generated from operations


 


261.062


219.185




 


 


 


 




Cash flows from investing activities


 


 


 




Purchase of property, plant and equipment & intangible assets


9,10


(63.368)


(110.018)




Dividends received


 


35.083


33.724




Interest received


 


7.026


9.278




Settlement of consideration of acquisition of further equity interest in subsidiary


23


(16.000)


-




Participation in share capital increase of subsidiaries & associates


23


(21.054)


(3.917)




Net cash used in investing activities


 


(58.313)


(70.933)




 


 


 


 




Cash flows from financing activities


 


 


 




Interest paid


 


(92.376)


(128.829)




Dividends paid


 


(74.480)


(59.578)




Loans to affiliated companies


 


(2.925)


-




Movement in restricted cash


13


144.445


11.873




Acquisition of treasury stock


15


(561)


(10.245)




Proceeds from borrowings


 


436.284


303.157




Repayments of borrowings


 


(406.857)


(446.937)




Net cash generated from / (used in) financing activities


 


3.530


(330.559)




 


 


 


 




Net decrease in cash and cash equivalents


 


206.279


(182.307)




 


 


 


 




Cash and cash equivalents at the beginning of the period


13


667.599


731.258




Exchange losses on cash and cash equivalents


 


3.815


(8.625)




Net decrease in cash and cash equivalents


 


206.279


(182.307)




Cash and cash equivalents at end of the period


13


877.693


540.326




 
 




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