REG - Hellenic Petroleum - FINANCIAL RESULTS 2Q14 <Origin Href="QuoteRef">HEPr.AT</Origin>
06/09/2014 22:41
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RNS Number : 7877N
Hellenic Petroleum S.A.
30 July 2014
PRESS RELEASE
30 July, 2014
Second quarter 2014 financial results
Second quarter 2014 financial results
Improved operating results across all main Group activities
Successful implementation of financial strategy improving liquidity and
financing terms
Operating results across Group business units were improved in 2Q14, driven
mainly from (a) performance of refining units, (b) increased contribution from
Domestic and International Marketing, (c) lower operating cost and (d)
stabilisation of sales volumes in the Greek market. On the contrary, the weak
environment for European refiners, as well as geopolitical developments that
create uncertainty in crude oil markets and increased cost of supply, continue
to have a negative effect. As a result of the above, Adjusted EBITDA came at
E49m (+133% vs 2Q13).
Since the beginning of the year, the Group has successfully completed a
significant part of its refinancing strategy, increasing long term credit
capacity and reducing cost, with the issue of two new Eurobonds, with a total
size of E620m and renegotiating existing facilities with improved terms.
Key figures for the 2Q and 1H period to 30 June 2014 are summarised below:
2Q13 2Q14 All numbers in Em 1H13 1H14
3,513 3,186 Refining Sales Volumes ('000 ΜΤ) 6,385 5,977
21 49 Adjusted EBITDA 59 100
(23) 53 EBITDA (35) 78
(62) (53) Adjusted Net Income (83) (72)
(95) (50) Net Income (173) (88)
27 36 Capex 37 61
- - Net Debt 1,802 1,625
2.6 1.6 ELPE benchmark refining margin ($/bbl) 3.0 1.9
Uncertainty in crude oil markets and weak margins for European refining
persisted in 2Q14
Challenges in European refining environment persisted throughout 1H14, with
uncertainty and increased volatility in crude oil markets due to the
developments in Iraq, as well as Libya and Ukraine. As a result, Brent crude
price recorded a 9-month high at $115/bbl.
Diesel exports from US and Russia to Europe remained at high levels, leading
diesel cracks to 4-year lows, while most product cracks were also lower than
last year. Benchmark Med refining margins remained weak, with FCC margins
averaging $2.3/bbl (2Q13: $3.5/bbl) and Hydrocracking at $3.2/bbl (2Q13:
$2.4/bbl).
Stabilisation of Greek fuels market continued
The stabilisation trend in transport fuels demand reported in the previous 3
quarters sustained through 2Q14 as well, while auto diesel consumption
continues to grow substituting gasoline usage, a trend that has already been
reported in new car registrations. According to preliminary domestic market
data, 2Q14 demand remained broadly stable at c.1.5m MT.
Improved financial results delivered
Adjusted EBITDA amounted to E49m, (+133% vs 2Q13). International and
especially European refining environment remained challenging, with weaker
benchmark margins and US dollar, negatively affecting 2Q14 results by c. E18m.
Despite those adversities, operational profitability improved in refining, as
well as all other main Group business units. Elefsina refinery increased its
contribution following the improvement works that were implemented during the
shut-down of last Spring, with utilisation exceeding 100% of nominal capacity,
while Thessaloniki refinery also operated with positive contribution. Total
refined product sales amounted to 3.2 million tons, with exports maintained at
50% of total sales.
Competitiveness improvement projects and cost control positively affected
results with additional E23m benefit for 2Q14, with the total annual recurring
cash contribution from these initiatives since 2008 exceeding E310m. Material
part of the benefit came from the reduction in G&A expenses which are 16%
lower in 1H14 compared to last year. The target for 2014 is for cash benefits
to exceed E80m.
On reported results, operating performance and gains from inventory valuation
led Reported EBITDA, to E53m (2Q13: -E25m), while Reported Net Results, which
include E53m of financial expenses and E48m of depreciation were also improved
at -E50m (2Q13: -E95m).
Capital expenditure came at E61m, relating mostly to maintenance and small
improvement projects in refining and logistics, with the Group remaining one
of the largest industrial investors in Greece.
Net Debt, amounted to E1.6bn, lower vs last year, with gearing (Net
Debt/Capital Employed) at 43%.
Successful implementation of financial strategy
During 2Q14, the Group implemented a number of actions for the improvement of
its financial position and the particularly high cost of funding, an outcome
of the recent years' crisis, affecting all Greek corporates. In this context
the Group proceeded with the issue of two Eurobonds, a 2-year, $400m at 4.625%
and a 5-year, E325m with a 5.25% coupon on 16 May and 4 July 2014
respectively. Both issues met strong domestic and international demand,
attracting both private and institutional funds, resulting in completion of
the book-building processes in a few hours and their significant
oversubscription. The new bond issues, a vote of confidence to HELLENIC
PETROLEUM outlook and prospects, will improve the Group's cost of funding and
liquidity, with positive effect for all business activities.
Furthermore, the renegotiation of syndicated facilities maturing in 2016, with
an original size of E605m, was completed with early voluntary prepayment of
E150m (in addition to a scheduled repayment of E50m), using the proceeds of
the USD Eurobond with the same maturity. The new E400m facilities are due up
to 2018.
Group debt maturity profile (pro-forma)
Following the above, the key objectives prescribed in the 2014 financial
strategy are largely achieved, with improvement of terms, average duration, as
well as cost of funding.
DESFA sale process moving forward
The regulatory approvals process for the sale of 66% of DESFA share capital,
from HELLENIC PETROLEUM and HELLENIC REPUBLIC ASSET DEVELOPMENT FUND to SOCAR,
for E400 million, by the competent authorities in Greece and the EU is in
progress. On 29 May 2014 the Greek Regulation Authority of Energy (RAE) has
issued a draft decision for the certification of DESFA as independent operator
for gas transportation and proceeded with the notification of its decision to
the DG Energy of the EU Commission, an important step towards the obtaining of
the required regulatory approvals and permits for the completion of the
transaction, expected in 2014. The amount that corresponds to HELLENIC
PETROLEUM for its 35% indirect share in DESFA is E212m and the proceeds of the
sale are earmarked for the reduction of gearing and funding cost.
John Costopoulos, Group CEO, commented on 2Q14 performance:
"The challenges in European refining sustained in 2Q14. In addition to weak
margins, volatility returned to crude oil markets, due to developments in
regional oil producing countries. Despite the difficult environment, HELLENIC
PETROLEUM achieved better operational performance in all business segments vs
last year, as reflected in improved financial results.
Elefsina refinery, following the maintenance and improvement works, has
reported a historical utilisation high, with all new units at record
performance, which is expected to further support the refinery's contribution.
Competitiveness improvement programs were a key driver for improved
operational profitability in all our business units, with significant savings
in 1H14, while the full year target of E80m cash benefit is expected to be
achieved.
In terms of our financial strategy, we have successfully completed the first
phase of our debt portfolio management, with the issue of two Eurobonds, with
total size of over E600m and the renegotiation of our largest syndicated
facility. With these actions we have achieved the reduction of funding costs,
as well as the improvement of the financial risk and maturity profile. The
benefits of those actions will positively affect our financial results from
2H14. I would like to thank our employees for their commitment and efficiency,
as well as our shareholders for their confidence and support."
Key highlights and contribution for each of the main business units were:
REFINING, SUPPLY & TRADING
- Domestic Refining Adjusted EBITDA came at E9m (2Q13: -E11m) as Elefsina
contribution, the improved operational performance of both Aspropyrgos and
Thessaloniki refineries, as well as cost control, with fixed opex excluding
maintenance 17% lower, offset the adverse refining environment.
- Production at 3.2m MT, with white products yield at 87%.
- Domestic market sales recorded a 2% increase, improving the Group's market
shares while exports, at 1.5m MT, remained at the same high level as a share
of total sales (50%).
DOMESTIC MARKETING
- The improved operational performance of Retail and C&I continued for one
more quarter; Aviation contribution was stronger on increased tourism, leading
Adjusted EBITDA to E10m (+41%).
- Reduction of fixed cost base by 8% versus 1H13 with improvement and
streamline of the organisational structure of the two marketing companies (EKO
and HF).
INTERNATIONAL MARKETING
- Adjusted EBITDA came at E13m, 29% higher on cost control and strong
operational performance of international retail networks, despite the decrease
in wholesale volumes.
PETROCHEMICALS
- Stronger PP margins and improved performance of Aspropyrgos and
Thessaloniki units, as well as synergies amongst them, led to a 26%
profitability increase with Adjusted EBITDA at E19m.
ASSOCIATED COMPANIES
- DEPA contribution to Group results came at E5m (vs E9m in 2Q13), due to
weak demand from IPPs
- ELPEDISON EBITDA at E13m (+21% vs 2Q13).
Key consolidated financial indicators (prepared in accordance with IFRS) for
the six-month period to 30 June 2014 are shown below:
E million 2Q13 2Q14 % Δ 1H13 1H14 % Δ
P&L figures
Refining Sales Volumes ('000 ΜΤ) 3,513 3,186 -9% 6,385 5,977 -6%
Sales 2,556 2,385 -7% 4,797 4,462 -7%
EBITDA -23 53 - -35 78 -
Adjusted EBITDA 1 21 49 133% 59 100 +68%
Net Income -95 -50 - -173 -88 -
Adjusted Net Income 1 -62 -53 - -83 -72 -
Balance Sheet Items
Capital Employed 4,101 3,751 -9%
Net Debt 1,802 1,625 -10%
Debt Gearing (ND/ND+E) 44% 43%
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 and
presence in 7 countries.
Further information:
V. Tsaitas, Investor Relations Officer
Tel.: +30-210-6302399
Email: vtsaitas@helpe.gr
E. Stranis, Group Corporate Affairs Director
Tel.: +30-210-6302241
Email: estranis@helpe.gr
G. Stanitsas, Group Communications Director
Tel.: +30-210-6302197
Email: gstanitsas@helpe.gr
Group Consolidated Statement of Financial Position
As at
Note 30 June 2014 31 December 2013
ASSETS
Non-current assets
Property, plant and equipment 11 3,432,245 3,463,119
Intangible assets 12 137,528 143,841
Investments in associates and joint ventures 672,878 691,501
Deferred income tax assets 72,328 63,664
Available-for-sale financial assets 1,195 1,163
Loans, advances and other receivables 98,984 106,735
4,415,158 4,470,023
Current assets
Inventories 13 911,748 1,005,264
Trade and other receivables 14 847,401 737,250
Derivative financial instruments 12,251 5,263
Cash, cash equivalents and restricted cash 15 1,270,745 959,602
3,042,145 2,707,379
Total assets 7,457,303 7,177,402
EQUITY
Share capital 16 1,020,081 1,020,081
Reserves 17 567,469 566,103
Retained Earnings 424,736 512,771
Capital and reserves attributable to owners of the parent 2,012,286 2,098,955
Non-controlling interests 112,446 115,511
Total equity 2,124,732 2,214,466
LIABILITIES
Non-current liabilities
Borrowings 18 1,531,009 1,311,804
Deferred income tax liabilities 42,996 45,405
Retirement benefit obligations 80,832 87,429
Provisions for other liabilities and charges 6,258 6,184
Other long term liabilities 23,346 24,584
1,684,441 1,475,406
Current liabilities
Trade and other payables 19 2,257,622 2,125,435
Current income tax liabilities 23,663 22,404
Borrowings 18 1,365,897 1,338,384
Dividends payable 948 1,307
3,648,130 3,487,530
Total liabilities 5,332,571 4,962,936
Total equity and liabilities 7,457,303 7,177,402
Group Consolidated Statement of Comprehensive Income
For the six month period ended For the three month period ended
Note 30 June 2014 30 June 2013 30 June 2014 30 June 2013
Sales 4,462,649 4,797,193 2,386,226 2,555,821
Cost of sales (4,271,776) (4,736,465) (2,272,588) (2,525,011)
Gross profit 190,873 60,728 113,638 30,810
Selling and distribution expenses (153,193) (151,311) (76,755) (75,198)
Administrative expenses (54,931) (61,421) (29,592) (31,530)
Exploration and development expenses (1,317) (1,848) (832) (1,064)
Other operating income / (expenses) - net 5 189 (2,740) (2,301) (7,246)
Operating profit / (loss) (18,379) (156,592) 4,158 (84,228)
Finance (expenses) / income - net 6 (106,251) (101,969) (53,396) (54,638)
Currency exchange gains / (losses) 7 (655) 8,641 (1,867) 9,808
Share of net result of associates 8 24,118 38,948 9,589 7,261
Profit / (loss) before income tax (101,167) (210,972) (41,516) (121,797)
Income tax (expense) / credit 9 10,164 33,225 (8,940) 26,741
Profit / (loss) for the period (91,003) (177,747) (50,456) (95,056)
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Fair value gains/(losses) on available-for-sale financial assets 23 (16) (12) 1
Fair value gains / (losses) on cash flow hedges 17 718 2,593 3,156 (6,693)
Derecognition of gains/(losses) on hedges through comprehensive income 17 - 24,027 - 10,406
Other movements and currency translation differences 528 (762) 503 233
Other comprehensive (loss) / income for the period, net of tax 1,269 25,842 3,647 3,947
Total comprehensive (loss) / income for the period (89,734) (151,905) (46,809) (91,109)
Profit attributable to:
Owners of the parent (88,035) (172,972) (50,191) (95,148)
Non-controlling interests (2,968) (4,775) (265) 92
(91,003) (177,747) (50,456) (95,056)
Total comprehensive income attributable to:
Owners of the parent (86,669) (147,065) (46,540) (91,306)
Non-controlling interests (3,065) (4,840) (269) 197
(89,734) (151,905) (46,809) (91,109)
Basic and diluted earnings per share (expressed in Euro per share) 10 (0.29) (0.57) (0.16) (0.31)
Group Consolidated Statement of Cash Flows
For the six month period ended
Note 30 June 2014 30 June 2013
Cash flows from operating activities
Cash generated from operations 20 211,705 186,827
Income and other taxes paid (7,777) (4,290)
Net cash used in operating activities 203,928 182,537
Cash flows from investing activities
Purchase of property, plant and equipment & intangible assets 11,12 (60,827) (37,344)
Proceeds from disposal of property, plant and equipment & intangible assets 133 3,403
Interest received 4,168 3,668
Dividends received 37,988 -
Investments in associates - net - (2,504)
Net cash used in investing activities (18,538) (32,777)
Cash flows from financing activities
Interest paid (113,564) (92,848)
Dividends paid to shareholders of the Company (359) (11)
Dividends paid to non-controlling interests - (1,826)
Proceeds from borrowings 376,087 1,276,000
Repayments of borrowings (137,322) (1,334,615)
Net cash generated from / (used in) financing activities 124,842 (153,300)
Net (decrease) / increase in cash, cash equivalents and restricted cash 310,232 (3,540)
Cash,cash equivalents and restricted cash at the beginning of the period 15 959,602 901,061
Exchange gains / (losses) on cash, cash equivalents and restricted cash 911 (1,758)
Net (decrease) / increase in cash, cash equivalents and restricted cash 310,232 (3,540)
Cash, cash equivalents and restricted cash at end of the period 15 1,270,745 895,763
Parent Company Statement of Financial Position
As at
Note 30 June 2014 31 December 2013
ASSETS
Non-current assets
Property, plant and equipment 10 2,794,262 2,804,714
Intangible assets 11 10,908 10,776
Investments in subsidiaries, associates and joint ventures 659,818 654,068
Deferred income tax assets 31,268 25,056
Available-for-sale financial assets 50 45
Loans, advances and long-term assets 142,925 142,742
3,639,231 3,637,401
Current assets
Inventories 12 805,244 882,040
Trade and other receivables 13 1,013,440 865,560
Derivative financial instruments 12,251 5,263
Cash, cash equivalents and restricted cash 14 1,023,499 739,311
2,854,434 2,492,174
Total assets 6,493,665 6,129,575
EQUITY
Share capital 15 1,020,081 1,020,081
Reserves 16 566,864 561,694
Retained Earnings (28,113) 24,594
Total equity 1,558,832 1,606,369
LIABILITIES
Non- current liabilities
Borrowings 17 1,456,985 1,226,430
Retirement benefit obligations 65,468 72,527
Provisions for other liabilities and charges 3,000 3,000
Other long term liabilities 13,217 13,895
1,538,670 1,315,852
Current liabilities
Trade and other payables 18 2,200,857 2,053,275
Current income tax liabilities 8 9,900 6,952
Borrowings 17 1,184,458 1,145,820
Dividends payable 948 1,307
3,396,163 3,207,354
Total liabilities 4,934,833 4,523,206
Total equity and liabilities 6,493,665 6,129,575
Parent Company Statement of Comprehensive Income
For the six month period ended For the three month period ended
Note 30 June 2014 30 June 2013 30 June 2014 30 June 2013
Sales 4,127,881 4,463,139 2,199,056 2,397,353
Cost of sales (4,058,335) (4,506,394) (2,152,428) (2,425,881)
Gross profit 69,546 (43,255) 46,628 (28,528)
Selling and distribution expenses (54,275) (54,077) (26,611) (26,522)
Administrative expenses (34,278) (38,228) (19,068) (19,692)
Exploration and development expenses (1,317) (1,848) (832) (1,064)
Other operating income / (expenses) - net 5 (2,003) (26,047) (4,161) (12,867)
Dividend income 47,545 17,122 47,545 17,122
Operating profit / (loss) 25,218 (146,333) 43,501 (71,551)
Finance (expenses) / income -net 6 (85,445) (81,004) (44,652) (43,261)
Currency exchange gains / (losses) 7 (509) 3,194 (1,592) 8,724
Profit / (loss) before income tax (60,736) (224,143) (2,743) (106,088)
Income tax expense 8 8,029 43,863 (7,714) 28,753
Profit / (Loss) for the period (52,707) (180,280) (10,457) (77,335)
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Fair value gains/(losses) on cash flow hedges 5,170 2,593 7,609 (6,693)
Derecognition of gains/(losses) on hedges through comprehensive income - 24,027 - 10,406
5,170 26,620 7,609 3,713
Other Comprehensive income/(loss) for the period, net of tax 5,170 26,620 7,609 3,713
Total comprehensive income/(loss) for the period (47,537) (153,660) (2,848) (73,622)
Basic and diluted earnings per share (expressed in Euro per share) 9 (0.17) (0.59) (0.03) (0.25)
Parent Company Statement of Cash Flows
For the six month period ended
Note 30 June 2014 30 June 2013
Cash flows from operating activities
Cash used in operations 19 120,384 (112,879)
Income tax paid (3,476) -
Net cash generated from / (used in) operating activities 116,908 (112,879)
Cash flows from investing activities
Purchase of property, plant and equipment & intangible assets 10,11 (54,658) (31,036)
Dividends received 37,988 -
Interest received 6 9,356 6,747
Participation in share capital increase of affiliated companies (5) (2,504)
Net cash used in investing activities (7,319) (26,793)
Cash flows from financing activities
Interest paid (89,619) (73,613)
Dividends paid (359) (11)
Loans to affiliated companies - (137,900)
Proceeds from borrowings 366,354 1,138,500
Repayments of borrowings (102,684) (717,583)
Net cash generated from financing activities 173,692 209,393
Net increase in cash, cash equivalents and restricted cash 283,281 69,721
Cash, cash equivalents and restricted cash at beginning of the period 14 739,311 627,738
Exchange gains / (losses) on cash, cash equivalents and restricted cash 907 (1,730)
Net increase in cash, cash equivalents and restricted cash 283,281 69,721
Cash, cash equivalents and restricted cash at end of the period 14 1,023,499 695,729
Full set of Group and Parent Company Financial Statements can be found on the
Group's website: www.helpe.gr
This information is provided by RNS
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