REG - Hellenic Petroleum - 3rd Quarter Results
11/11/2021 16:25
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RNS Number : 1416S Hellenic Petroleum S.A. 11 November 2021
PRESS RELEASE
11 November 2021
Third quarter / 9M 2021 financial results
Profitability recovers to pre-crisis levels, with improved operating
performance across all businesses and progress of the Group's strategic plan
HELLENIC PETROLEUM announced its 3Q21 consolidated financial results, with
Adjusted EBITDA coming in at €125m, up by 90% vs 3Q20 and 58% compared to
2Q21, with corresponding Net Income at €39m. Likewise, 9M21 Reported Net
Income came in at €258m, improved by over €600m compared to last year.
Results were mainly driven by oil demand recovery in all key markets, as well
as improved benchmark refining margins, following several quarters at
historical lows. The strong operational performance in refining and marketing,
both in Greece and internationally, as well as the first results from the
strategic transformation programs, also had a positive impact. A significant
part of the operational improvement was offset by the surge in energy costs
and CO(2) emissions allowance pricing, which has become one of the most
important challenges for industries in Greece and internationally.
Refining, Supply & Trading increased its contribution to the highest
levels of the last 5 quarters, led by the higher refining availability and the
improvement in the international environment. Furthermore, fuel demand in
Greece continued to increase, with domestic sales accounting for 50% of total
sales, the highest since 2019. The above positive results were partially
offset by the significant increase of variable operating costs, due to the
sharp rise in international natgas prices to multi-year highs, which affected
the pricing of electricity, as well as of CO(2) emissions allowances.
Petrochemicals' results continued to improve, as product demand exceeds
current supply. In Domestic and International Marketing, where an expansion
and upgrade plan at the retail network is being implemented, sales and
profitability were higher.
The associated companies in the Power and Gas sector reported another quarter
of improved performance, mainly due to the higher electricity demand.
IFRS Reported financial results were further improved, due to the continuous
increase in crude oil and product prices, with 9M21 Reported EBITDA at €531m
and Net Income at €258m.
Strategy and main developments
The Group's corporate restructuring process continues, with the Company's BoD
approving, on 30 September 2021, the draft demerger deed for the hive down of
the Refining, Supply & Trading and Petrochemical business to the new
company. The deed is expected to be submitted for approval by the
Shareholders' General Meeting in early December and its implementation is
expected to be completed in the beginning of 2022. The new corporate
structure will have multiple benefits in terms of flexibility in developing
and financing of new activities, risk management, as well as improving value
transparency across the Group's activities' portfolio.
Engineering works at the 204 MW PV park in Kozani are at the final stage, with
14 of the 18 parks -corresponding to 166 MW- already mechanically completed,
while connection to the HV network and commercial operation are expected in
1Q22.
With reference to the sale process of DEPA Infrastructure (65% HRADF - 35%
HELPE), in which the Group participated as a joint seller with the HRADF,
Italgas was declared as preferred investor, with an offer of €733m,
corresponding to €256m for HELLENIC PETROLEUM's participation. The share
purchase agreement is expected to be signed soon, following the Court of Audit
approval, while it is anticipated that the transaction will be completed in
1H22, subject to customary regulatory approvals.
Finally, during 3Q21, the on-shore exploration concessions "Arta-Preveza" and
"NW Peloponnese" were returned to the Greek State, while in October the
Hellenic Hydrocarbons Resources Management Agency was notified about the
intention to also return the West Patraikos concession.
Andreas Shiamishis, Group CEO, commented on results:
"Economic recovery accelerated during 3Q21, mainly due to stronger tourism and
increased economic activity, with a direct impact on our sector. The Group
results are improved in almost all respects vs last year as a result of better
environment and, more importantly, the continuous and steady improvements in
controllable areas, such as refining availability, commercial performance in
Greece and our international subsidiaries, as well as cost control.
However, aside those positive developments, the ongoing global energy crisis,
with a sharp increase in international NatGas prices and a corresponding rise
in -natgas linked- electricity and CO2 pricing, affects the industry and the
energy transition process.
The above highlight further the importance and necessity of the Group's
strategic transformation process and the implementation of "VISION 2025"
strategy, with the new corporate structure, a corporate governance upgrade, as
well as the significant resources and capital reallocation, in order to grow
in new energy market and proceed with the equally important decarbonization of
our core activities".
Benchmark refining margins improvement
Since the end of July, OPEC ++ has agreed to a gradual increase in crude oil
exports, by 400 kbpd, with a significant impact on global crude supply.
However, as demand continued to recover from COVID-crisis lows at a faster
pace, a further increase in international prices was recorded, with Brent
crude averaging $73/bbl, up from $43/bbl last year and $69/bbl in 2Q20.
As a result of higher demand, the main product cracks recovered from their
recent historical lows. In addition, the increase in the crude oil supply,
particularly for high-sulfur, put pressure on the relative pricing of those
grades vs Brent, with the Brent-Urals differential at the highest levels of
the last decade. Those led to a recovery in benchmark refining margins, with
the FCC averaging at $5.2/bbl and Hydrocracking at $2.9/bbl. Finally, energy
costs increased significantly, with gas and power prices reaching historical
high.
The US dollar slightly strengthened vs the Euro in the 3Q21, with €/$
exchange rate averaging at 1.18, corresponding to last year's levels.
Domestic fuel market demand continuous improving
The lifting of mobility and travel restrictions as well as the restart of the
economy and tourism during the quarter, resulted in ground fuels demand
increasing by 8% vs LY, reaching 2019 levels. Total domestic fuels market
demand amounted to 1.6m MT, -1% compared to 3Q19. The Aviation and Bunkering
market also recorded a significant recovery compared to last year, with the
consumption of shipping fuels up by 28% to 712k MT and aviation fuel more than
doubling to 476k MT, but falling short of 2019 by 20%.
Reduced financing cost; €201m Eurobond repayment
On 14 October 2021, the Group repaid the remaining €201m bonds through
available cash, while it will review its capital structure and opportunities
in international markets, following the completion of HELLENIC PETROLEUM's
demerger process. The repayment of 4.875% interest rate bonds will have a
positive impact on the Group's financing cost, which in 3Q21 amounted to
€24m, reduced by 4% compared to last year.
In addition, a consent solicitation process is underway to the holders of
October '24 notes, to amend the existing conditions, so that the demerger of
HELLENIC PETROLEUM takes place in a credit neutral way. Net Debt amounted to
€1.8bn, significantly reduced vs LY and at similar levels vs 2Q21.
Key highlights and contribution for each of the main business units in
3Q21 were:
REFINING, SUPPLY & TRADING
- Refining, Supply & Trading 3Q21 Adjusted EBITDA at
€57m.
- Production amounted to 3.6m MT (+9%), due to the
Aspropyrgos increased availability. Sales amounted to 3.8m MT (+5%), with
domestic market up 13%, at 1.1m MT.
- HELPE realized margin at $8.7/bbl, the highest in two years, driven
by stronger benchmark refining margins, as well as by the Supply and Marketing
performance.
PETROCHEMICALS
- PP benchmark margins, even lower compared to 2Q21, remained at
high levels, leading Adjusted EBITDA to €21m (+40%) in 3Q21 and €102m in
9M21, double vs 9M20.
MARKETING
- In Domestic Marketing, the recovery in fuel demand in all
sub-markets resulted in increased sales volumes and profitability to
significantly higher levels, offsetting the notable rise in transportation and
electricity costs, with 3Q21 Adjusted EBITDA at €29m (+68%).
- In International Marketing, the sales' increase in the retail
networks and the good operational performance led the 3Q21 Adjusted EBITDA to
€20m (+15%).
ASSOCIATED COMPANIES
- DEPA Group contribution to 3Q21 consolidated Net Income amounted to
€3m.
- Elpedison's EBITDA for the 3Q21 came in at €20m (+31%), with 9M21
at €64m (+50%), due to increased demand for power as well as the
contribution of NatGas plants in the system mix, offsetting the decline in
profitability in the retail sector.
HELLENIC PETROLEUM GROUP
Key consolidated financial indicators (prepared in accordance with IFRS) for
3Q/9M21 are shown below:
€ million 3Q20 3Q21 % Δ 9M20 9M21 % Δ
P&L figures
Refining Sales Volumes ('000 ΜΤ) 3,667 3,842 5% 11,173 11.309 1%
Sales 1,474 2,442 66% 4,460 6.399 43%
EBITDA 19 140 - -321 531 -
Adjusted EBITDA (1) 66 125 90% 256 264 3%
EBIT -42 76 - -509 341 -
Adjusted EBIT (1) 9 70 - 93 115 24%
Net Income -43 51 - -379 258 -
Adjusted Net Income (1) -8 39 - 13 51 -
Balance Sheet Items
Capital Employed 3,989 3,937 -1%
Net Debt 2,125 1,866 -12%
Debt Gearing (ND/ND+E) 53% 47% -11%
Notes:
1. Calculated as Reported adjusted for inventory effects and other
non-operating items. Also, Adjusted EBIT includes Associates.
Further information:
V. Tsaitas, Investor Relations Officer
Tel.: +30-210-6302399
Email: vtsaitas@helpe.gr (mailto:vtsaitas@helpe.gr)
Group Consolidated statement of financial position
As at
Note 30 September 2021 31 December 2020
ASSETS
Non-current assets
Property, plant and equipment 10 3.411.942 3.379.813
Right-of-use assets 11 224.638 235.541
Intangible assets 12 107.675 105.841
Investments in associates and joint ventures 7 452.176 416.542
Deferred income tax assets 69.600 72.161
Investment in equity instruments 3 454 959
Loans, advances and long term assets 70.980 71.676
4.337.465 4.282.533
Current assets
Inventories 13 1.110.477 694.410
Trade and other receivables 14 656.066 544.795
Income tax receivables 8 15.935 37.699
Assets held for sale - 2.466
Derivative financial instruments 3 54.982 9.945
Cash and cash equivalents 15 918.011 1.202.900
2.755.471 2.492.215
Total assets 7.092.936 6.774.748
EQUITY
Share capital and share premium 16 1.020.081 1.020.081
Reserves 17 271.115 273.959
Retained Earnings 715.457 492.457
Equity attributable to equity holders of the parent 2.006.653 1.786.497
Non-controlling interests 64.231 62.340
Total equity 2.070.884 1.848.837
LIABILITIES
Non-current liabilities
Interest bearing loans & borrowings 18 2.007.035 2.131.371
Lease liabilities 170.392 170.896
Deferred income tax liabilities 82.845 32.572
Retirement benefit obligations 196.373 194.887
Provisions 38.687 39.022
Other non-current liabilities 27.544 27.957
2.522.876 2.596.705
Current liabilities
Trade and other payables 19 1.690.263 1.546.844
Derivative financial instruments 3 1.182 4.635
Income tax payable 3.767 1.673
Interest bearing loans & borrowings 18 777.541 744.561
Lease liabilities 25.152 30.240
Dividends payable 1.271 1.253
2.499.176 2.329.206
Total liabilities 5.022.052 4.925.911
Total equity and liabilities 7.092.936 6.774.748
Group Consolidated statement of comprehensive income
For the nine month period ended For the three month period ended
Note 30 September 2021 30 September 2020 30 September 2021 30 September 2020
Revenue from contracts with customers 4 6.399.298 4.459.739 2.442.231 1.473.723
Cost of sales (5.726.348) (4.637.613) (2.243.792) (1.404.035)
Gross profit / (loss) 672.950 (177.874) 198.439 69.688
Selling and distribution expenses (232.284) (235.075) (82.226) (76.630)
Administrative expenses (100.582) (101.141) (36.310) (33.461)
Exploration and development expenses (2.468) (4.160) (805) (1.823)
Other operating income and other gains 5 21.747 29.488 4.577 5.680
Other operating expense and other losses 5 (18.469) (20.110) (7.440) (5.891)
Operating profit /(loss) 4 340.894 (508.872) 76.235 (42.437)
Finance income 2.227 3.904 812 1.179
Finance expense (75.122) (81.433) (25.027) (26.501)
Finance expense - lease finance cost (7.611) (8.108) (2.482) (2.672)
Currency exchange gain / (loss) 6 12.934 10.831 4.717 6.577
Share of profit / (loss) of investments in associates and joint ventures 7 41.996 23.870 9.515 5.472
Profit / (loss) before income tax 315.318 (559.808) 63.770 (58.382)
Income tax credit / (expense) 8 (57.425) 180.666 (12.322) 15.020
Profit / (loss) for the period 257.893 (379.142) 51.448 (43.362)
Profit / (loss) attributable to:
Equity holders of the parent 254.325 (380.972) 49.397 (45.131)
Non-controlling interests 3.568 1.830 2.051 1.769
257.893 (379.142) 51.448 (43.362)
Other comprehensive income / (loss):
Other comprehensive income / (loss) that will not be reclassified to profit or
loss (net of tax):
Actuarial gains / (losses) on defined benefit pension plans 17 (1.280) (2.953) - (2.953)
Share of other comprehensive income / (loss) of associates 17 161 288 15 71
Changes in the fair value of equity instruments 17 (332) (411) 3 (62)
Net other comprehensive income / (loss) that will not be reclassified to (1.451) (3.076) 18 (2.944)
profit or loss (net of tax):
Other comprehensive income / (loss) that may be reclassified subsequently to
profit or loss (net of tax):
Recycling of (gains) / losses on hedges through comprehensive income 17 (31.794) 25.077 (7.806) -
Fair value gains / (losses) on cash flow hedges 17 29.802 (27.398) 9.493 3.742
Currency translation differences and other movements 17 (78) 78 8 (66)
Net other comprehensive income / (loss) that may be reclassified subsequently (2.070) (2.243) 1.695 3.676
to profit or loss (net of tax):
Other comprehensive income / (loss) for the period, net of tax (3.521) (5.319) 1.713 732
Total comprehensive income / (loss) for the period 254.372 (384.461) 53.161 (42.630)
Total comprehensive income / (loss) attributable to:
Equity holders of the parent 250.808 (386.265) 51.109 (44.401)
Non-controlling interests 3.564 1.804 2.052 1.771
254.372 (384.461) 53.161 (42.630)
Basic and diluted earnings / (losses) per share 9 0,83 (1,25) 0,16 (0,15)
(expressed in Euro per share) (file:///C:/Users/Gkallitsi/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/YNCS67J9/2021%2009m%20Group%20-%20nolinks.xlsx#'9'!C83)
Group Consolidated statement of cash flows
For the nine month period ended
Note 30 September 2021 30 September 2020
Cash flows from operating activities
Cash generated from / (used in) operations 20 86.823 (176.897)
Income tax received / (paid) 10.389 (30.054)
Net cash generated from / (used in) operating activities 97.212 (206.952)
Cash flows from investing activities
Purchase of property, plant and equipment & intangible assets 10,12 (193.305) (146.244)
Proceeds from disposal of property, plant and equipment & intangible 2.171 1.827
assets
Share capital issue expenses (4) (51)
Grants received 70 230
Interest received 2.227 3.904
Prepayments for right-of-use assets (218) -
Dividends received 6.525 8.519
Proceeds from disposal of assets held for sale 2.649 -
Proceeds from disposal of investments in equity instruments 360 -
Net cash generated from / (used in) investing activities (179.525) (131.816)
Cash flows from financing activities
Interest paid (54.255) (62.643)
Dividends paid to shareholders of the Company (30.316) (152.622)
Dividends paid to non-controlling interests (1.635) (1.060)
Participation of minority shareholders in share capital increase of subsidiary - 34
Proceeds from borrowings 18 4.554 349.201
Repayments of borrowings 18 (102.063) (22.047)
Payment of lease liabilities - principal, net (24.412) (24.123)
Payment of lease liabilities - interest (7.611) (8.108)
Net cash generated from / (used in) financing activities (215.738) 78.633
Net increase / (decrease) in cash and cash equivalents (298.051) (260.134)
Cash and cash equivalents at the beginning of the period 15 1.202.900 1.088.198
Exchange gain / (loss) on cash and cash equivalents 13.161 269
Net increase / (decrease) in cash and cash equivalents (298.051) (260.134)
Cash and cash equivalents at end of the period 15 918.011 828.333
Parent Company Statement of Financial Position
As at
Note 30 September 2021 31 December 2020
ASSETS
Non-current assets
Property, plant and equipment 9 2.718.992 2.766.635
Right-of-use assets 10 25.098 32.157
Intangible assets 11 12.216 8.094
Investments in subsidiaries, associates and joint ventures 1.041.704 1.064.566
Investment in equity instruments 3 37 587
Loans, advances and long-term assets 42.092 42.956
3.840.139 3.914.995
Current assets
Inventories 12 984.948 599.613
Trade and other receivables 13 566.445 489.979
Income tax receivables 7 13.995 33.830
Derivative financial instruments 3 54.982 9.945
Cash and cash equivalents 14 651.548 992.748
2.271.918 2.126.115
Total assets 6.112.057 6.041.110
EQUITY
Share capital and share premium 15 1.020.081 1.020.081
Reserves 16 276.749 279.576
Retained Earnings 689.432 520.475
Total equity 1.986.262 1.820.132
LIABILITIES
Non-current liabilities
Interest bearing loans and borrowings 17 1.704.829 2.064.808
Lease liabilities 17.294 21.279
Deferred income tax liabilities 56.250 2.773
Retirement benefit obligations 160.684 159.782
Provisions 22.240 22.287
Other non-current liabilities 12.124 12.685
1.973.421 2.283.614
Current liabilities
Trade and other payables 18 1.470.067 1.427.067
Derivative financial instruments 3 1.182 4.635
Income tax payable 416 450
Interest bearing loans and borrowings 17 673.611 494.675
Lease liabilities 5.827 9.284
Dividends payable 1.271 1.253
2.152.374 1.937.364
Total liabilities 4.125.795 4.220.978
Total equity and liabilities 6.112.057 6.041.110
Parent Company Statement of Comprehensive Income
For the nine-month period ended For the three-month period ended
Note 30 September 2021 30 September 2020 30 September 2021 30 September 2020
Revenue from contracts with customers 4 5.822.246 3.952.006 2.197.047 1.261.066
Cost of sales (5.384.184) (4.327.683) (2.097.451) (1.291.089)
Gross profit / (loss) 438.062 (375.677) 99.596 (30.023)
Selling and distribution expenses (72.094) (71.764) (25.880) (19.842)
Administrative expenses (61.058) (61.283) (22.788) (20.225)
Exploration and development expenses (76) (1.094) (22) (28)
Other operating income and other gains 5 16.865 21.465 4.403 1.485
Other operating expense and other losses 5 (39.144) (21.430) (5.539) (8.733)
Operating profit/(loss) 282.555 (509.783) 49.770 (77.366)
Finance income 4.296 7.150 1.366 2.240
Finance expense (68.519) (76.920) (22.766) (24.854)
Finance expense - Lease finance cost (854) (1.003) (265) (311)
Dividend income 22.809 11.533 22.809 11.533
Currency exchange gains/(losses) 6 12.825 10.885 4.784 6.569
Profit/(Loss) before income tax 4 253.112 (558.138) 55.698 (82.189)
Income tax credit / (expense) 7 (52.918) 178.389 (8.481) 20.275
Profit/(Loss) for the period 200.194 (379.749) 47.217 (61.914)
Other comprehensive income/(loss):
Other comprehensive income/(loss), that will not be reclassified to profit or
loss (net of tax):
Actuarial losses on defined benefit pension plans 16 (1.163) (2.938) - (2.938)
Changes in the fair value of equity instruments 16 (345) (409) - (78)
Net other comprehensive income / (loss) that will not be reclassified to (1.508) (3.347) - (3.016)
profit or loss (net of tax):
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 29.802 (27.398) 1.687 3.742
Recycling of (gains)/losses on hedges through comprehensive income 16 (31.794) 25.077 - -
Net other comprehensive income / (loss) that may be reclassified subsequently (1.992) (2.321) 1.687 3.742
to profit or loss (net of tax):
Other Comprehensive income/(loss) for the period, net of tax (3.500) (5.668) 1.687 726
Total comprehensive income/(loss) for the period 196.694 (385.417) 48.904 (61.188)
Basic and diluted earnings/(losses) per share 8 0,66 (1,24) 0,15 (0,20)
(expressed in Euro per share)
Parent Company Statement of Cash flows
For the nine-month period ended
Note 30 September 2021 30 September 2020
Cash flows from operating activities
Cash generated from / (used in) operations 19 (68.388) (292.121)
Income tax received / (paid) 14.427 (22.768)
Net cash generated from / (used in) operating activities (53.961) (314.889)
Cash flows from investing activities
Purchase of property, plant and equipment & intangible assets 9,11 (76.439) (116.474)
Proceeds from disposal of property, plant and equipment & intangible 46 4.846
assets
Dividends received 54.809 161.042
Interest received 4.296 7.150
Participation in share capital increase of subsidiaries, associates and joint (1.138) (11.618)
ventures
Proceeds from disposal of equity instruments 361 -
Net cash generated from / (used in) investing activities (18.065) 44.946
Cash flows from financing activities
Interest paid (58.026) (62.874)
Dividends paid (30.316) (152.622)
Proceeds from borrowings 17 2.071 338.521
Repayments of borrowings 17 (187.778) (190.279)
Payment of lease liabilities - principal (7.088) (7.394)
Payment of lease liabilities - interest (854) (1.003)
Net cash generated from /(used in) financing activities (281.991) (75.651)
Net increase / (decrease) in cash and cash equivalents (354.017) (345.594)
Cash and cash equivalents at the beginning of the period 14 992.748 888.564
Exchange gains / (losses) on cash and cash equivalents 12.817 430
Net increase / (decrease) in cash and cash equivalents (354.017) (345.594)
Cash and cash equivalents at end of the period 14 651.548 543.400
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. END QRTMZMMMVMLGMZMRecent news on HELLENiQ ENERGY Holdings SA
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